State: California
Volume: 220
Term: 1934-1934
Jurisdiction(s): California
Source: https://static.case.law/cal/220.pdf

[S. F. No, 14909. In Bank—January 81, 1934,]

ALMA C. KADELLO, Respondent, v. LUDWIG J. KA-
DELLO, Appellant.

a
ee
Clarence E. Rust for Appellant.

Edward P. Talbott for Respondent.

. LANGDON, J.—This is an appeal from an order direct-
ing defendant to pay to respondent certain sums for tem-
porary alimony, attorneys’ fees and costs in a divorce
action.

On September 8, 1932, Ludwig Kadello received a decree
of divorce from Alma Kadello in Reno, Nevada, upon the
ground of desertion, the defendant being served personally
in California. On October 7, 1932, Alma Kadello com-
menced a divorce action in California against Ludwig
Kadello, serving him personally within this state. An
order to show cause why defendant should not pay alimony
pendente lite, etc., was issued, and at the hearing the court
found that defendant’s Nevada decree was void and made
the order.

The evidence fully supports the trial court’s conclusion.
Defendant testified that he had a job promised him in
Nevada; that he gave up his residence in Oakland, Cali-
fornia, went to Reno, worked for a while pitching hay, and
secured a divorce; that the expected job did not develop
and he soon after returned to Oakland. On the other
hand, plaintiff testified that during May and June of
1932 (within the period of her purported desertion) she
lived with and had matrimonial intercourse with defendant
on numerous occasions. Her testimony on this point was
corroborated by Mrs. Coehlo, her daughter by a former
marriage, and by Mrs. Letty Berg, a friend. Plaintiff
also testified that she did not desert him, but that he left
her on June 14, 1932, telling her he was going out of
town about some work.

HI It thus appears that several witnesses testified to
perjury by defendant as to the grounds for his Reno di-
voree; and his story of acquisition of a bona fide domicile
there is vague, indefinite, and according to the evidence
submitted by plaintiff, he was not justified in leaving her
at all.

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In this state of the record the trial court was justified
in concluding that his purported domicile in Nevada was
fraudulent and that the said decree was void. (See Delanoy
v. Delanoy, 216 Cal. 27 [13 Pac, (2d) 719, 86 A. L. R
1821].)

| | Defendant complains that the court refused to
permit him to offer evidence of his wife’s cruelty and
adultery in support of the validity of the Nevada decree.
The relevancy of such evidence is not apparent in this
connection. [J It is further objected that plaintiff did
not establish defendant’s ability to pay, but there was
evidence of a sale of a house by defendant, and of his
steady employment. The court awarded $100 on account
of attorney’s fees, $10 for costs, and $50 per month to
plaintiff. No sufficient showing is made against the pro-
priety of the order.

The order is affirmed.

Preston, J., Thompson, J., Curtis, J., Waste, C. J.,
Shenk, J., and Seawell J., concurred.

[Crim, No. 3668, In Bank—January 31, 1934.]

THE PEOPLE, Respondent, v. JAMES A. TALBOT et al.,
Appellants.

a

Monroe B. Kulberg, Clare Woolwine, Leonard Wilson,
Bourke Jones, James T. Boyle, Forrest F. Murray, Bugene
D. Williams, Jerry Giesler, Edwin V. McKenzie and Walter
H. Linforth for Appellants.

U. S. Webb, Attorney-General, and Frank Richards,
Deputy Attorney-General, for Respondent.

THE COURT.—A hearing was granted in this case after
decision by the District Court of Appeal, Second Appellate
District, Division Two, to consider the question whether
the appropriation of corporate funds by the defendants
was made with fraudulent intent, an element necessary to
constitute embezzlement. We have painstakingly re-exam-
ined the record on this issue. Certain evidence tended to
show that defendants were not conscious that their acts
amounted to embezzlement even if they did constitute bad
business practice. The record shows that each of the de-
fendants and numerous employees had drawing accounts with
the corporation; that the withdrawals by defendants were
made openly, with no attempt at concealment; that the can-
celed checks were returned to the corporation; that defend-
ants were charged on the books with all of the expenditures;
and that no manipulation of accounts took place. i | It
is further contended, and we may assume that it is true,
that the practice of making advances of this sort to corporate
officers and employees during this period was common, not

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only in the Richfield company but in other corporations as
well. The prevalence of this unlawful practice cannot, of
course, justify it. .

These and other facts were before the trial court,
and that court was permitted to draw the inference of
fraudulent intent from the admitted fact that the funds
were appropriated and used for the personal purposes of the
defendants. In this state of the record, the appellate court
may not disturb the findings and judgment.

‘We therefore adopt the opinion prepared by Mr. Justice
pro tem. Archbald, of the District Court of Appeal, as the
opinion of this court. It reads as follows:

“James A. Talbot, Clarence M. Fuller and Raymond W.
McKee were charged in count I of an indictment with con-
spiracy to commit the crime of grand theft, and in the
remaining nine counts thereof they were charged with nine
separate offenses of the same nature. The defendants were
tried jointly on all counts before the court without a jury,
the trial resulting in an acquittal of all three on the charge
of conspiracy. Talbot was found guilty on counts II and
VI, Fuller guilty as to counts III, IV, V, VII, VIII and
IX, and McKee guilty under count X. Hach defendant was
found not guilty as to all counts other than the ones upon
which he was convicted. From the judgments of conviction
entered upon such findings, and from, the orders denying
their respective motions for a new trial, defendants have
separately appealed.

‘At the time the nine alleged acts of grand theft were
committed, Talbot was chairman of the board of directors
of the Richfield Oil Company of California, Fuller was
president and McKee a vice-president and assistant to Tal-
bot. As chairman of the board, Talbot had charge of
financing and production, Fuller of refining and marketing
and McKee of accounting. The amount which the defend-
ants are charged in the first count with having conspired
to take from the company is $245,325, which is the sum
total of the nine overt acts of taking set out in said count.
The amounts charged in counts II to X, inclusive, as having
been taken by defendants, and the dates on which they
were respectively taken, are the same as alleged in count
I with reference to the nine overt acts, and each is the
amount of a check drawn against the funds of said company.

PC a 9

“Prior to becoming chairman of the board of directors
of the Richfield Oil Company, Talbot was the president of
that corporation, the by-laws providing that the president
should have ‘general and active management of the business
of the corporation’. When the office of chairman of the
board of directors was created, an amendment to the by-laws
was adopted providing that such chairman should ‘share
with the president in the general management of the busi-
ness of the company and the direction of all other officers of
the corporation’. The transcript of testimony herein im-
presses the reader with the fact that the very general powers
thus delegated were used to their utmost by Talbot, when
president of the company, and by Talbot and Fuller later.
As one witness expressed it, ‘it was more or less a two man
company’, and apparently the directors reposed ‘absolute
confidence’ in them. Counsel-in their briefs agree that the
head of the company exercised ‘almost autocratic powers’ in
handling its affairs, from the beginning to the calamitous
end. In fact, the only limit that seems to have been im-
posed on such autocratic powers by the board of directors
was in July of 1929, when an amendment to the by-laws
was adopted providing that ‘no single item of capital ex-
penditure shall be made by the company in excess of $50,000
without the approval of one of the two representatives of
certain investment bankers on the finance committee of the
institution.

‘*With this preamble we shall discuss the case of each
appellant separately.

“Appeal of J. A. Talbot.

“Count IT of the indictment, on which this appellant
was found guilty, involves a check of the Richfield Oil
Company in the sum of $50,000 dated October 2, 1929,
payable to the order of Ingoldsby-Giles & Company, a stock
brokerage firm in Los Angeles. There is testimony to the
effect that this check was issued at the request of Talbot,
through McKee, and that Talbot directed that it be charged
to his account on the books of the company, but also to
charge Fuller’s account with $25,000 of it, crediting his,
Talbot’s, account with a like amount. Talbot testified that
he ordered his secretary to send a check for $50,000 to the
brokerage firm but that he did not know until later that

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a Richfield check was sent. His secretary, however, testified
that Talbot called her from San Francisco and told her that
a Richfield check had been sent to Ingoldsby-Giles & Com-
pany, to charge it to his account and to advise the brokerage
concern to credit him with $25,000 and Fuller with $25,000.
Appellant Talbot had an account with the brokerage firm
ealled ‘J. A. Talbot No. 7 Account’, in which one New-
berger, also a director, of the Richfield Oil Company, was
jointly interested, and also a private account. The broker-
age house also carried an account called ‘Richfield Em-
ployees’ Account’, in which was kept the stock transactions
of several officers and employees of the company. Prior
to October 2d, money was requested by the brokers ‘prin-
cipally for the adjustment of said No. 7 account’. Talbot
owed said firm on his personal account, on September 30,
1929, $74,024.10, and was short 360 shares of common stock
of the Richfield company of the then approximate market
value of $40 per share. Appellant Fuller owed the same
firm on October 1, 1929, the sum of $306,709.73, and ap-
parently the brokerage office was holding at the time, to
protect such balance, 8000 shares of Richfield and 1000
shares of so-called Fokker stock. Fuller knew nothing of
the credit of $25,000 to his account until later, when Talbot
told him that it was necessary to advance it to the brokerage
firm to keep the stock from being sold.

“Count VI, under which, also, Talbot was convicted, in-
volves a check of the Richfield Oil Company dated October
24, 1929, in the sum of $50,000, payable to Fuller and en-
dorsed by him, and signed by Talbot and McKee. Fuller
told Talbot a day or so before the check was issued that
the brokerage firm had about 17,000 shares of Richfield
stock, apparently deposited to cover the account of the
‘Richfield Employees’, carried in the name of their New
York correspondent; that margins were being demanded on
such account and that the stock would be sold if the brokers
did not get $100,000 immediately. Talbot arranged to have
a loan made to Fuller of $50,000 by a certain bank and had
the check for $50,000 issued which is the basis of count VI.
Fuller then issued his check for $100,000 in favor of the
brokerage firm. The $100,000 was not paid in time, how-
ever, to stop the sale in New York, but was apportioned to
the ‘‘Employees’ Account’ with Ingoldsby-Giles & Company,

_ | Le iW

$59,000 of it going to the credit of Fuller in such account
and the balance being apportioned between other names
therein. There is evidence which indicates that appellant
Talbot knew at the time Fuller’s check was delivered by
him to the brokerage firm that the 17,000 shares had been
sold in the east and that he gave it to the firm because he
had promised them ‘$100,000.

“For the purpose of proving ‘felonious intent’ evidence
was introduced of fourteen Richfield company checks ordered
by Talbot aggregating the sum of $186,886.10, which ap-
parently went entirely for the personal use of said appellant
and not for any company expense. One of the checks was
for $80,000, the balance of the purchase price of his private
yacht, and others aggregating approximately $15,000 were
for insurance thereon. The evidence also shows that such
withdrawals were not authorized by the board of directors
and were without the personal knowledge of the directors,
with the possible exception of one of the $50,000 checks
which was brought to the attention of director Newberger
after it reached the hands of the brokerage firm above
mentioned. It likewise appears that the withdrawals made
were charged in the personal accounts of the respective
officers, which were kept under the heading, ‘Due from
officers and employees. Account 418 A’. Up to 1927 it
was apparently the practice of Peat, Merrick, Mitchell &
Company, who audited the books of the Richfield company
semi-annually, to submit a detailed report of such account
to the board of directors, but after that year the practice
was changed and two types of balance sheets were made,
one ‘a detailed report supporting the certified statements and
giving in greater detail all of the assets and liabilities and
discussing them’, and the other a ‘condensed balance sheet’,
which did not contain the details of the officers’ accounts.
This ‘condensed balance sheet usually goes to the stock-
holders and is printed, published’. The detailed report ‘is
a sort of confidential balance sheet for the executive of the
company’ or ‘for reference’.

“As bearing on the question of fraudulent intent and
showing his good faith and lack of motive for wrongdoing
as charged, appellant Talbot introduced evidence of his
financial condition. Such evidence tended to show that his
net worth on August 31, 1929, was approximately $5,439,000,

12 Pe |

consisting of real estate, accounts receivable, secured and
unsecured, life instirance and stocks. Among the latter was
an equity in Richfield stocks amounting to $937,697 of the
common stock and $24,440 of the preferred. His books
showed $20,686.69 in cash in bank at that time. The
dividends on his Richfield stock for the year 1929, in excess
of $100,000, were left with the brokerage houses holding
such stock. It was also shown that during the year 1929
Talbot paid into the market for the purpose of supporting
the price of Richfield stock '$1,577,571.18, and that $50,000
additional was paid to banks for the reduction of loans
secured by Richfield stock, the market price of which had
depreciated. Approximately $600,000 of this amount was
borrowed from banks during the month of October alone,
which went ‘into the Richfield stock in the market’, The
evidence further shows that at the end of 1929 the following
real estate, as valued on this appellant’s personal books, was
unineumbered: His home, $350,000; Albany (14 interest),
$20,000; Long Lake, $5,000, and Bakersfield, 115,000, and
that by October of 1930 the last of this real estate was incum-
bered. In January, 1931, Talbot filed a voluntary petition
in bankruptey, due, as he states, ‘almost exclusively’ to his
effort to ‘stabilize’ Richfield stock on the market. On Oc-
tober 1, 1929, he held $58,736 shares of Richfield common
stock, but sold about 18,000 shares during the month and
bought 14,810 more. He was sold out of the difference by
Plunkett & Lillienthal, certain of the brokers he was dealing
with. Space forbids detailing anything except the most
important points of the evidence.

“Appellant urges: (1) That the evidence does not show
any criminal or fraudulent intent, but on the contrary
affirmatively excludes such intent; that the court erred: (2)
in finding him guilty as to count VI, whereas appellant
Fuller was found not guilty thereon; (3) in admitting in
evidence the ‘disavowal’ resolution of December 8, 1930;
(4) in admitting evidence of other acts dissimilar in char-
acter and too remote as to time and conditions; (5) in per-
mitting the introduction into evidence of the New York
accounts without sufficient foundation laid; (6) in admitting
into evidence certain inventories and testimony relating
thereto; and (7) in not limiting evidence on behalf of a
particular defendant to such defendant.

a | 18

“*(1) Appellant contends that it had been his custom, not
only in the Richfield company but in other companies of
which he had been an executive, to have drawing accounts
against which were charged advances made to officers and
employees; that both sums of money he is charged with
taking openly and without concealment or any of the other

, usual indicia of fraudulent acts.

HM ‘The taking charged as grand theft was on the
theory of embezzlement. Section 484 of the Penal Code,
so far as material to such theory, provides: ‘Every person
. .. who shall fraudulently appropriate property which has
been entrusted to him ... is guilty of theft’. Section 503
of the same code defines embezzlement as ‘the fraudulent
appropriation of property by a person to whom it has been
entrusted’, Section 504 provides that ‘every officer, director,
trustee, clerk, servant or agent of any... corporation
(public or private) who fraudulently appropriates to any
use or purpose not in the due and lawful execution of his
trust, any property which he has in his possession or under
his control by virtue of his trust . . . is.guilty of embezzle-
ment’. From these sections it clearly appears that fraudu-
lent intent is an essential element of the offense of embezzle-
ment, and such is the ruling of our courts. (People v.
Mitchell, 74 Cal. App. 164 [240 Pac. 86]; People v. Morley,
89 Cal. App. 451 [265 Pac. 276].) Appellant says that
the element of concealment is lacking, and points to the case
of People v. O’Brien, 106 Cal. 104 [89 Pac. 825], as one
emphasizing the necessity of concealment as a fact from
which fraudulent intent may be inferred. We do not read
the case that way. The court decided in effect that the
evidence showed simply a case of disputed mutual accounts,
which might have been embezzlement if the defendant had
not acted openly and without any attempt at concealment.

“‘While secrecy or concealment is evidence of a
criminal or felonious intent, nevertheless there may be em-
bezzlement where the appropriation is openly made and
consequently without concealment. (People v. Connelly, 4
Cal. Unrep. 858 [88 Pac. 42]; Gurley v. State, 157 Ark. 413
[248 S. W. 902; Russell v. State, 112 Ark, 282 [166 S. W.
540].) :

“Tt is urged that such fraudulent intent must be shown
by facts or circumstances independent of and in addition to

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the act of conversion, and among other cases cited in support
of the contention is People v. Royce, 106 Cal. 173 [87 Pac.
630, 39 Pac. 524]. In that case the treasurer of a corpora-
tion received a draft for $10,350 and deposited it in his
personal account at a bank, notifying the bookkeeper of that
fact. No depository bank had ever been named by the
directors of the corporation. Three days after the deposit _
was made the company received from him the sum of
$8,310.85. He was charged with embezzlement. The evi-
dence apparently did not show what became of the balance
or that defendant did not have it ready to be produced when
ealled for, and there was no evidence that a demand to
produce was made upon him. Under such circumstances no
felonious intent was shown.

“The element of felonious intent in every contested crimi-
nal case must necessarily be determined from the facts and
circumstances of the case. (People v. Kirk, 94 Cal. App. 878
[271 Pac. 347].) In our opinion the law is well expressed
in the case of Manghan v. State, 11 Ga. App. 427 [75 S. E.
512, 516], where the court says: [J ‘An officer or agent
of a corporation cannot take money of the corporation which
is entrusted to him, or which comes into his possession by
virtue of his office or agency, and use it even temporarily
for his personal benefit and avoid-criminal responsibility by
ealling it a loan. The law calls such a transaction a wrong-
ful conversion, from which a fraudulent intent can be
inferred’. (See, also, People v. Lyon, 33 Hun (N. Y.), 623,
687; People v. Schrager, 15 Il. 169 [146 N. B. 151, 154);
Orr v. State, 6 Ga. App. 628 [65 8. E. 582]; Commonwealth
v. Tenney, 97 Mass. 50, 58; State v. Leicham, 41 Wis. 565;
People v. Butts, 128 Mich. 208 [87 N. W. 224]; State v.
Merkel, 189 Mo. 315, 319 [87 S. W. 1186]; State v. Kort-
gaurd, 62 Minn. 7, 16 [64 N. W. 51, 55]; National Life etc.
Ins. Co. v. Gibson, 31 Ky. Law Rep. 101 [101 8. W. 895, 897,
12 L. R. A. (N. 8S.) 717]; Gurley v. State, supra; Patterson
v. United States, 39 App. [D. C.] 84, 90.)

“The erime of embezzlement is purely statutory, and
legislation with reference thereto resulted from the failure
of prosecutions under the common law crime of larceny to
reach a case where the possession of property was obtained
by consent, and the resulting breach of trust by the agent,
officer or bailee, although it as effectually deprived the

— a 15

owner of his property as though it had been taken out of
his possession by stealth, was not punishable at common law.
In the case of People v. Gordon, 138 Cal. 328 [65 Pac. 746,
747, 85 Am. St. Rep. 174], speaking of our code definition
of embezzlement, the court says: [| ‘The essential ele-
ments of embezzlement are the fiduciary relation arising
where one intrusts property to another, and the fraudulent
appropriation of the property by the latter.’ There would
seem to be no hidden meaning in the use of the word
fraudulent in such definition. It is true that where, as in
the cases of People v. Royce, 106 Cal. 173 [87 Pac. 630, 39
Pac. 524], and People v. Page, 116 Cal. 386 [48 Pac. 326],
the money is deposited in the personal account of the de-
fendant but no evidence is introduced showing that it was
ever converted to his own use, no ‘fraudulent appropriation’
is shown. But we are sure that if the evidence in such
eases showed, without question, an appropriation of the
money to the personal use of the defendants, and contrary
to the purposes of the trusts, the fraudulent intent would
have been imputed to them.

‘One of the definitions of ‘fraud’ given by the
Standard Dictionary is: ‘Any act... that involves a
breach of duty, trust, or confidence, and which is injurious
to another, or by which an undue advantage is taken of
another,’ and an act is declared to be fraudulent that is
characterized by fraud. [J We think the legislature used
the word ‘fraudulent’, in its definition of embezzlement, to
distinguish an ‘appropriation’ by an agent of money or
property under circumstances that might be merely tinged
with suspicion as to the agent’s intent, from an appropria-
tion for purely personal uses of the agent, as contrasted
with the purpose for which the money or property was en-
trusted to him. |} In other words, in every case where
the officers of a corporation who are necessarily entrusted
with the money and property of the concern use it, know-
ingly and intentionally, for their own purposes, there is a
‘fraudulent appropriation’ thereof which is termed em-
bezzlement by the statute, and the fact that such officers
intended to restore the money or property is of no avail to
them if it has not been restored before information laid or
indictment found charging them with embezzlement (Pen.
Code, sec. 512), and even if prior to the bringing of such

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charges the officers voluntarily and actually restore the prop-
erty, such fact does not constitute a defense but merely
authorizes the court in its discretion to mitigate the offense
(see. 518). It would seem that the legislature here has
shown in very clear terms that it is the immediate breach
of trust that makes the offense, rather than the permanent
deprivation of the owner of his property.

“In the recent case of People v. Gordon, 206 Cal. 29 [273
Pac. 568], the defendant, an attorney, was entrusted with
the collection of amounts due on certain bonds. The money
was collected but only about half of it was paid over to his
client by the defendant. When the balance was demanded
the attorney claimed that he was to receive one-half as his
fee for collection. The court there said: ‘Defendant claims
there is no showing of fraudulent intent on his part, as
his actions were unconcealed and were based on his under-
standing that he was to receive half of the sum collected.
In our opinion, however, the evidence was amply sufficient
to establish the fraud. Defendant’s testimony at most
raised a conflict which was resolved by the verdict of the
jury in favor of the people. The jury was properly in-
structed on the subject of the element of specifie intent,
and its determination of the matter is final.’ We think
the reasoning of that case applies with great force to the
one before us. Under the evidence produced by the prose-
cution serious misappropriations of funds of the corporation
are shown, contrary to all authority given and in violation
of the trust imposed. J The fact that this appellant
intended to repay the money taken, or was amply able
to do so, is of no avail in the face of the fact that the money
was not replaced prior to indictment found. Jj The
claim that he used the money in an honest effort to stabilize
the price of stock on the market, for the benefit of the
corporation and its stockholders and not for the selfish pur-
pose of making his own holdings more valuable, created but
a conflict in the evidence which the court, trier of the facts,
decided against him, and that determination is final so far as
an appellate court is concerned. [J Neither does the
claim that appellant had been accustomed to drawing and
using the funds of the corporation for his personal needs,
having such withdrawals charged to his personal account
and eventually paying the money back by credits due him

a es WW

or payments made by him, relieve the acts from the stain of
criminality. Nor can we subscribe to the doctrine that long-
continued wrongdoing sanctifies or purifies such conduct.
Even if all of the directors of the corporation knew of such
custom, the wrong was not made right. They were each

charged with the trust to use the funds of the company for.

company needs, and it might be seriously questioned whether
an authorization or ratification by the board of such acts
would not have resulted in involving the directors rather
than in excusing the officers. That the trial judge under-
stood the law as to intent clearly appears from the record,
and in our opinion the evidence amply sustains the conelu-
sion he must have reached thereon.

“*(2) The evidence shows that appellant Talbot
signed the check on the Richfield company for $50,000,
which was given to appellant Fuller and went into the
$100,000 check given by the latter and which there is evi-
dence to show was finally turned over to Ingoldsby-Giles &
Company by Talbot himself, in accordance with his promise
to give them that sum. It is to be remembered, also, that
appellant Talbot arranged for the loan to Fuller which made
up the balance of the $100,000. If the evidence under the
point now under consideration affects the parties jointly
charged alike, the rule invoked by this appellant applies.
However, where there is the slightest difference in the testi-
mony as between two jointly tried, the jury or the judge,
as the trier of facts, may weigh such testimony and make
such difference (Davis v. State, 75 Miss. 637 [23 So. 770]);
and when that is done, the fact that the evidence also
involves the other to some extent will not relieve the one of
culpability. We think such rule applies here. (People v.
Edwards, 72 Cal. App. 102, 117 [236 Pac. 944].)

HE ‘“(3) We see no error in admitting the so-called
‘disavowal’ resolution in evidence. It is true it was passed
some time after the acts charged were committed, but it
had some bearing on the question of whether they were done
with the consent of the board of directors, and this in turn
might have had some bearing on the question of the intent
of appellant. In addition, each director had also testified
that no consent was given.

HE ‘‘(4) We have heretofore indicated that in our
opinion evidence of the several acts, introduced to show in-

a

ne

18 Pe 7

tent, under the circumstances of this case had a direct bear-
ing on the question of fraudulent intent. The fact that
some of them were of a later date would not seem to make
the admission of testimony concerning them erroneous.
Bearing on intent as they do, they showed a continuous
practice of the same nature both before and after the acts
on which convictions resulted. Widely separated acts might
not exclude the idea of inadvertence, but happening as they
did here, they bear, in our opinion, even more directly on
the question of intent.

**(5) We agree with appellant that the statement
of the New York accounts should not have been admitted
in evidence. While there is evidence showing that both
appellants Talbot and McKee knew there was a discrepancy
of some kind existing between the accounts of the Richfield
Oil Corporation of New York, a subsidiary of the California
corporation, and the parent organization, which resulted
in the showing of certain expenses as assets and which in-
flated the profits of the company for the year 1929 as
shown by the books, which in turn increased the bonus
money divided among the executives, there seems to be no
evidence connecting any of appellants with the making of
the entries which resulted in such discrepancy. We there-
fore fail to see how the books themselves could have been
properly used against. them, much less a summary taken
therefrom, the books not being present. But after an
examination of the entire cause, including the evidence, we
are forced to the conclusion that the judgment of the court
would have been the same regardless of such error.

HH ‘‘(6) Over the objection of appellant evidence of
certain changes made in the inventories on the direction of
appellant McKee, which resulted in inflating the showing of
profits of the company for the year 1929 and hence in-
ereased to a certain extent the bonuses paid on the profits
shown for that year, was introduced. The only connection
shown with such changes, so far as appellant Talbot is con-
cerned, is that his office was in close proximity to McKee’s,
probably across the corridor, at the time they were made.
The trial judge permitted the evidence to go in, although,
as he stated, it would have to be connected up with all
defendants and its materiality as bearing on intent shown,
otherwise he would entertain a motion to strike. While

PC a 19

such changes in the inventories and consequent taking of
inereased bonus money might be the subject of a separate
conspiracy, it could hardly be a part of the conspiracy
pleaded, as that was limited to a definite sum, viz., the total
of the amount taken by the several overt acts pleaded, none
of which included any sums received by way of fictitious
bonus payments. Possibly a conspiracy to take money by a
different method might have some bearing on the intent with
which the takings in the alleged conspiracy were consum-
mated, but on that point we express no opinion. The fact
remains, however, that apparently no motion to strike was
made when all the evidence as to the changing of the in-
ventories was concluded. Assuming that one had been prop-
erly presented and overruled—which ruling, however, so far
as appellants Talbot and McKee are concerned, we are
compelled to conclude the court would not have made—still
we are of the opinion that such evidence did not in any way
affect the judgment rendered by the court.

HH ‘‘(7) Appellant complains because his motion that
the evidence of all witnesses called by a particular defendant
be limited to that defendant was denied. Such motion was
made almost at the close of this appellant’s defense and
prior to the introduction of evidence on behalf of his co-
defendants. The same motion was also made by appellants
Fuller and McKee and the same ruling followed. Appellant
Talbot cites as an example of the harm done him by the
court’s ruling the testimony of his codefendant McKee as
to the issuance of the check involved in count II, stating
that up to that time there had been no direct evidence to
show that he, Talbot, personally requested the check to be
issued. Prior to McKee’s testimony both Talbot and his
secretary had testified concerning such check, which testi-
mony we have heretofore referred to. From such evidence
the conelusion could readily be drawn that Talbot ordered
the Richfield check to be issued and directed its application.
The testimony of McKee was corroborative only, and we
fail to see how Talbot could have been prejudiced thereby.
Nor was he prejudiced by the testimony of McKee regarding
the check for $100,000, which was admitted in evidence as
against McKee only and which was rejected by Talbot, who
told McKee he had made other arrangements, viz. the
arrangements by which the $100,000 payment was made

20 a 7

through the $50,000 check which is involved in count VI
and the $50,000 bank loan to McKee arranged by Talbot.
The trial court was faced with a delicate situation, in view
of the fact that a conspiracy charge was joined with several
other joint charges. No motion was made for a separate
trial of the conspiracy charge. In our opinion the court
did the best it could under the circumstances, and we see no
error in the ruling complained of.

“Appeal of C. M. Fuller.

“Counts III, IV, V, VII, VIII and IX, upon which this
appellant was found guilty, involve checks of the Richfield
Oil Company which were charged to the account of Fuller
on the books of the company as follows: Count III: Check
for $50,325 dated October 2, 1929, used to pay personal
obligation of Fuller and Talbot and to release 3500 shares
of Richfield stock so that a larger personal loan could be
obtained thereon. Count IV: Check for $5,000 dated Octo-
ber 4, 1929, used for personal expenses of Fuller. Count V:
Check for $25,000 dated October 4, 1929, used to protect
margin account of Fuller with stock brokers. Counts VII,
VIII and IX involve three checks all dated October 29,
1929, one for $25,000, issued to Fuller, one for $10,000,
issued to his secretary, and one for $15,000, issued to his
assistant, Randall. The last two were deposited in the -
accounts of the payees, who gave Fuller their individual
checks for the amount of those deposited by them, appel-
lant depositing such individual checks in his own account.
Fuller’s explanation was that he did not want to deposit
in his own account more than the $25,000 check of the com-
pany on the same day. He admits the use of the checks
as stated.

“Appellant Fuller contends: (1) That inasmuch as the
conspiracy count’ upon which he was found not guilty in-
volves as overt acts the same checks for the misappropriation
of which he was found guilty, it follows that he should have
been found not guilty of the substantive offenses; (2) that
there was no proof of the existence of the Richfield Oil
Company as a corporation; (3) that subsequent acts were
improperly admitted to show prior guilty intent; (4) that
the prosecution is estopped to deny the right of appellant
to withdraw such sums from the treasury of the company;
(5) that the district attorney, ‘as a representative of the

_ | | 24

stockholders’, is denied the right to accuse appellant of any
criminal intent, as the monetary advances received estab-
lished the relation of debtor and creditor; (6) that verdicts
on several counts must not be inconsistent; and (7) that the
evidence is insufficient to justify the verdict, as no criminal
intent was shown, but good intent was proven.

HM ‘‘(1) An essential element of the first count was
the criminal conspiracy, which was not included in the nine
substantive offenses pleaded, so there was no jeopardy by
reason of the verdict of not guilty on such count. (People
vy. Clensey, 97 Cal. App. 71 [274 Pac. 1018].)

“*(2) We see no merit in this contention. It would
hardly lie in the mouth of one profiting by funds unlawfully
taken from an entity even pretending to act as a corporation
to deny its corporate existence. Appellant could not have
been misled under the circumstances, and it would seem to
be immaterial whether the Richfield Oil Company was a
corporation de jure or de facto, as it clearly appears it
was the money of such company that was taken. However,
the certificate of incorporation of such company was intro-
duced in evidence without objection.

**(8) The contention raised under this numeral is an-
swered in our discussion of the fourth point in the Talbot
appeal,

HE‘ (4) There could be no estoppel on the part of the
prosecution to deny the right of appellant to make with-
drawals under the facts of this case.

HM ‘‘(5) We fail to see how the relation of debtor
and creditor is established by the facts and circumstances
presented, or how the district attorney could be prevented
from prosecuting a criminal charge based on such acts.
It is not shown that the stockholders were advised as to what
was going on. The evidence is to the effect that since 1927,
after which date the large withdrawals for private purposes
were made, the details of account 418-A were not sent to
the stockholders. Even such details as were sent them
before would not put them on notice of the use being put
to the withdrawals.

**(6) We see no inconsistency in the verdicts.

**(7) We have discussed this contention under the appeal
of Talbot, and in our opinion the same conclusion must be

reached here.

22 es —

“Tn his reply brief appellant Fuller assigns as additional
error the introduction in evidence of the statement taken
from the books of the Richfield Oil Company of New York,
and also the ‘disavowal resolution’. We have discussed
these both under the Talbot appeal, and in our opinion the
conclusions there reached are applicable here.

“Appeal of R. W. McKee.

“Tt is conceded by this appellant that he was an employee
of the Richfield Oil Company of California and that the
$15,000 mentioned in count X of the indictment belonged to
such company; that such sum was technically or construc-
tively in his possession and that it was applied by him to
his personal use. On October 24, 1929, one G. A. Smith
loaned McKee $15,000, which the latter gave to his stock
broker in payment of margins demanded. A few days later
Smith was arrested and charged with conspiracy to evade
the gasoline tax, his bail being fixed in the sum of $15,000.
Someone in Smith’s office telephoned these facts to McKee
and wanted to know if ‘we’ would furnish the bond. McKee
then called the insurance department of the Richfield com-
pany and asked them to arrange it. He was informed that
a check had to be posted for the amount of the bond, where-
upon appellant ordered a check issued, on November 7, 1929,
payable to the Fidelity & Deposit Company of Maryland.
This money was later paid to Smith in satisfaction of Me-
Kee’s loan. Apparently neither appellants Talbot nor
Fuller knew of the issuing of the check or of the deposit
of the bond until after it was done.

‘Appellant MeKee contends: (1) That the evidence is
insufficient to support the judgment; that the court erred
(2) in admitting evidence of subsequent withdrawals, (3)
in admitting evidence of a mutilated check of the Richfield
company for $100,000, (4) in admitting in evidence certain
resolutions guaranteeing loans made by the Bank of Italy
to certain groups of officers and employees and testimony
concerning same, (5) in admitting in evidence the ‘disavowal
resolution’ and (6) the New York statement.

“(1) The evidence shows that McKee was also convicted
on a later indictment containing three counts charging with-
drawals of $1,000, on September 28, 1929; $2,000, on Octo-
ber 4, 1929, and $2,000, on October 22, 1929. Appellant’s

a es 23

testimony shows withdrawals in 1929 of $33,450.13 and
eredits of $15,848.67, of which latter amount $11,045.07 is a
bonus credit of date December 31, 1929. He was also
credited with an additional bonus in February of 1930,
which it is said was due him in 1929, and appellant urges
that there was then paid back in 1929 an amount in excess
of all withdrawals made, in view of the fact that the account
had a debit balance in December of 1928 of $16,873.21. His
debit balance on September 30, 1929, two days after the
first withdrawal involved here, was $22,582.14, after receiv-
ing credits in September for an item of ‘expense’ of $494.
The only other credits to the account in 1929 are as fol-
lows: October 31, ‘Expense’, $875; November 30, ‘Expense’,
$426; December 31, ‘Expense’, $57.10, and the bonus of
$11,045.07. In other words, the best that can be said of
such showing is that appellant McKee intended to repay,
which is no defense. Nor is actual restoration to be con-
sidered except in mitigation. (Sec. 518, Pen. Code.) We
have considered this contention in the appeal of Talbot and
see nothing in the facts with respect to this appellant that
would change our opinion in that regard. McKee, as an
officer of the company, was under Talbot, and made the
withdrawal of $15,000 without even the latter’s consent,
although that could have availed nothing.

HMI ‘‘(2) There was no error in admitting evidence of
subsequent withdrawals. |

“*(3) The check mentioned on this point was issued at
McKee’s request, thinking Talbot intended to use it in con-
nection with the $100,000 payment to Ingoldsby-Giles &
Company. It was rejected by Talbot and a $50,000 check
of the company used. Appellant was acquitted on the count
to which such testimony relates, and we fail to see how any
prejudice could possibly have resulted.

“(4) During the first week in November of 1929
appellant Talbot informed the treasurer of the Richfield
Oil Company that he wanted to do something for certain
employees in the purchase of stock, as a reward for faithful
services and also because they had suffered rather heavily in
loss of stock, and told him to see McKee and get the details
of the plan. The treasurer interviewed McKee, who gave
him a list of names of employees, among which was McKee’s.
The latter then either asked him to go to the Bank of Italy

24 Le |

and arrange for a loan of $50,000 or told him that arrange-
ment had already been made. At any rate, the treasurer
went to the bank and received a note for $50,000, which
he had the several employees go to be helped sign. Subse-
quently the bank asked for a guarantee of the note and the
request was conveyed to McKee, who later gave the treasurer
a copy of what purported to be a resolution of the board
of directors authorizing the execution of a guarantee of the
instrument by the company and a guarantee purporting to
have been executed pursuant thereto. The resolution was
dated May 7, 1930, and the guarantee May 12, the treasurer
delivering them to the bank. Later, the bank being dissatis-
fied with such resolution and guarantee, it was presented
with others satisfactory to it. Certain checks of the com-
pany making interest payments on the note, issued at the
request of McKee, were introduced in evidence. Later the
bank demanded a payment on said loan, which demand the
treasurer communicated to McKee, and a Richfield company
check for $20,000 was drawn and sent to him for delivery.
to the bank. There was no renewal clause in the first guar-
antee, and the bank asked for another. This request was
communicated to McKee by the treasurer, appellant saying,
‘we will give it to them’. Shortly thereafter a purported
resolution authorizing the guaranteeing by the company
of the $30,000 balance due on said note and a guarantee
thereof issued by the company were delivered to the treas-
urer, who gave them to the bank. Appellant asked the com-
pany’s attorney to draw up the first resolution, and the
latter advised him that in his opinion the board of directors
had no power to make such a guarantee. McKee then told
the attorney ‘that was our instructions’ and that he was
not asked for advice. It was the introduction in evidence of
these three sets of resolutions and guarantees of which this
appellant complains.

“‘The money obtained on the $50,000 loan was added to
the sum of $26,237.50 obtained by the same employees on
another loan, and forwarded to the Bank of Italy in San
Francisco to cover a draft drawn by appellant McKee for
$76,237.50, with 2500 shares of Richfield stock attached. A
loan of $100,000 was made by the same bank to this group
of employees on November 15, 1929, out of which the
$26,237.50 loaned was paid, and on April 3, 1930, a cheek

a a 25

of the Richfield Oil Company for $25,000 was issued and
applied on the $100,000 loan. Various other checks of the
company were issued at the request of McKee and applied on
said loan in payment of either interest or principal. Several
of the directors of the company testified that at no time
were the resolutions above referred to passed upon or ap-
proved by the board. Appellant urges that such guarantees
and resolutions were not material to the conspiracy charge
because of a date later than the completion of the con-
spiracy; that his connection with the procuring thereof was
open and aboveboard and that, not being on the directorate,
he knew nothing of whatever action was taken. -

“The evidence is almost inextricably interwoven with the
payment of interest and principal made with the company’s
checks of which this appellant had knowledge and which the
trial court evidently considered the material part of the
transaction. It would seem that, even though subsequent
to the conspiracy, there was some evidence connecting joint
action by Talbot and McKee in their issuance. It was
brought to McKee’s knowledge that in the opinion of the
attorney for the company the directors had no power to
make the resolutions or guarantees referred to. They were
apparently executed without any actual meeting of the
board of directors, which must have been known by McKee
from his connection with their procurement, and, as the
court said, might be evidence of other joint offenses indicat-
ing intent. In view of the finding of not guilty on count I
the court certainly gave no weight to them on any joint
charge, and we fail to see how they could have affected
the individual charges on which appellant was found guilty.

“*(5) In view of the testimony of each director that no
consent was given to the withdrawals made, we fail to see
where any prejudice resulted in admitting in evidence the
so-called ‘disavowal resolution’.

““(6) We have discussed this point as well as the preced-
ing one in the appeal of Talbot, and the conclusions there
reached, in our opinion, apply here.’’

In the oral argument, by special permission of this court,
a point was presented which was not raised in the District
Court of Appeal. This was to the effect that the opinion
gives an unconstitutional interpretation to the embezzlement

26 ee] a

statute. We are satisfied that no provision of the federal
or state Constitution has been violated in this case.
The judgment and orders are affirmed as to each appellant.

Rehearing denied.

[S. F. No, 14842, In Bank—January 31, 1984.]

In the Matter of the Estate of JOHN BUCHANAN Mc-
CREERY, Deceased. ANGLO-CALIFORNIA TRUST
COMPANY, as Administrator, et al., Respondents, v.
RAY L. RILEY, as Controller, ete., Appellant.

a PC 27
es

W. H. H. Gentry, T. H. Christiansen, James W. Hickey
and A. W. Brouillet for Appellant.

Goldman & Altman for Respondents.

Todd W. Johnson and Philip D. Johnston, as Amici
Curiae on Behalf of Respondents. .

PRESTON, J.—By this appeal the controller of this state
seeks to reverse an order of the superior court in the above-
entitled estate. The order complained of reversed in toto a
previous order fixing and requiring the payment of an in-
heritance tax under the Inheritance Tax Act of California
(Deering’s Gen. Laws, 1931, vol. 8, p. 4709, Act 8443), and
further provided for refund of the tax theretofore paid.
The facts upon which the appeal is based were stipulated
and are substantially as follows: .

John Buchanan McCreery died testate in February, 1931,
a resident and citizen of Great Britain, owning 66624 shares
of the capital stock of the McCreery Estate Company, a
corporation organized and existing under the laws of the
state of California and the certificates of stock representing
said shares were in the state of California on the date of
decedent’s death, but had no business situs therein. Dece-
dent’s will was probated in England but ancillary proceed-
ings were had in the Superior Court of the State of Califor-
nia in and for the City and County of San Francisco.

28. a 7

Respondents are the ancillary administrator and the widow
of decedent, his sole legatee.

The inventory in said ancillary proceedings showed said
shares of stock. An inheritance tax appraiser was appointed
by the court in said proceedings to appraise the estate of
decedent in this state and to report to the court on any
inheritance tax payable to the state of California. Said
appraiser thereafter reported a tax payable in the sum of
$5,609.30 by reason of the transfer of said shares of stock.
Said report of the appraiser was confirmed by the court
and the inheritance tax on said transfer was fixed at said
sum by an order of court made August 18, 1931. On the
same day said tax, less the cash discount, was paid. There-
after, and on May 4, 1982, respondents made an application
to said court for a reversal of said order fixing said tax
and for a refund of the tax theretofore paid. Thereafter
and on October 20, 1932, said court gave its judgment and
order granting this relief. From this last-mentioned order
the controller has prosecuted this appeal.

HI Originally, the sole question raised was as to the
proper construction of subdivision 3 of section 11 of said
Inheritance Tax’ Act of California, as amended in 1929.
(Stats. 1929, p. 1834.) Later, however, under an order of
this court, counsel were directed to brief the following legal
question: ‘‘Does the due process clause of the 14th amend-
ment to the Constitution of the United States prevent the
state of California from collecting an inheritance tax on the
transfer of stock in a California corporation in the estate
of a nonresident of the United States, the certificates repre-
senting the stock being physically in the state of Cali-
fornia?’’ Our conclusion upon this latter question makes it
unnecessary to give consideration to said question of pro-
cedure first above mentioned.

It is not disputed that under subdivision 2 of section
2 of said Inheritance Tax Act, it was the legislative intent
to impose a tax upon the transfer here disclosed. This sec-
tion requires the payment of a succession tax, ‘‘when the
transfer is by will or intestate laws of property within this
state and the decedent was a non-resident of the state at the
time of his death...’ For a confirmation of the power
to impose this tax see MeDougald v. Lilienthal, 174 Cal. 698
[164 Pac, 887, L. R. A. 1917F, 267], and Estate of Miller,

— 29

184 Cal. 674 [195 Pac. 413, 16 A. L. R. 694]. But to deter-
mine said constitutional question we must rely upon the
applicable pronouncements of the Supreme Court of the
United States on this subject. [J We have made a care-
ful study of the several decisions cited and the net result of
such holdings thus far is that, as to tangible personal prop-
erty, the fourteenth amendment to the federal Constitution
forbids its taxation in any other state of the United States
than the one in which it is located; that as to choses in
action and other intangibles, the same section forbids taxa-
tion in more than one state. The constitutional provision
protects the one class of property to the same extent as the
other. The only difference in the two situations is that
as to intangibles the courts still apply the legal fiction of
mobilia sequuntur personam and have thus confined the
place of taxation to the state of the domicile of the owner.
But this restriction has as yet been applied only to estates
of decedents who were residents within the United States.
(Farmers Loan Co. v. Minnesota, 280 U. S. 204 [50 Sup.
Ct. 98, 74 L, Ed. 871, 65 A. L. R. 1000]; First Nat. Bank
vy. Maine, 284 U. 8. 312 [52 Sup. Ct. 174, 76 L. Ed. 313,
77 A. L. R. 1401].) The rule which selects the domicile, as
distinguished from the situs of the intangibles, was and
is largely one of logic and convenience. But the reasons
assigned for this selection all fail where the decedent was
domiciled without the United States. It by no means seems
certain that a valid rule could not have been promulgated
which fixed the constructive situs of the intangibles as the
place of taxation instead of the domicile of the owner.
Moreover, the above cited holding does not specifically pur-
port to fix the rule controlling the jurisdiction for taxation
where the owner of the intangibles was domiciled without
the United States, whether he was a citizen of the United
States or a citizen of a foreign nation. Intangible property
in one of the states of a nonresident of the United States
receives the protection of our laws. Why may not the
privilege of receiving it by transfer or succession be taxed by
some state at least of the United States? And if it may be
so taxed, why may not such tax be assessed in the state of
the actual or constructive situs of such property?

Direct light is shed upon this question by the case of
Burnet v. Brooks, 288 U. S. 378, 396 et seq. [53 Sup. Ct.

30 Le Ys

457, 77 L. Ed. 844, 86 A. L. R. 747], wherein the decedent
was a British citizen domiciled in Cuba, where he died own-
ing foreign bonds and stock in foreign corporations, the
physical evidences of which were all situated in the state
of New York. It was held that under the United States
Revenue Act of 1924, which purported to tax that part of
the gross estate of said decedent ‘‘which at the time of his
death is situated in the United States”’ said intangibles were
so situated in the United States. One of the contentions
made in said cause was that such taxation was forbidden by
the due process clause of the fifth amendment to the Consti-
tution of the United States. In an able and extended
opinion, carefully reviewing and quoting copiously from
previous decisions of the courts, it was held that said choses
in action had a situs in the United States and consequently
they might be subjected to a death duty tax by the Con-
gress and that said fifth amendment set up no barrier to the
collection of such a tax. It therefore seems self-evident that
if said choses in action were property within the United
States, they were at the same time property within the state
of New York; also that if the fifth amendment did not forbid
taxation of the transfer of said property by the United
States, the fourteenth amendment should not forbid a
similar tax, if imposed by the state of New York.

Applying this reasoning to the case before us (stock in
a domestic corporation), why may not the state of Cali-
fornia tax the transfer of the property of a nonresident of
the United States, which property has its actual or eon-
structive situs within the jurisdiction of this state? To so
hold, we encounter no question of the proper distribution of
power between the states as the rights of no other state are
involved. The question is: Has a state the power to tax
the transfer of property within its boundaries, belonging to
persons who were domiciled without the United States?
The logie of the Burnet case, supra, seems to justify the
right of the state of California to tax such a transfer.

HM That case disposes also of the further question
raised by respondents that to tax the transfer is to violate
the Ilay-Pauncefote Treaty now subsisting between the
United States and Great Britain, in that it would require
the payment of a tax by subjects of the latter country where,
under similar circumstances, citizens of the former would not

Ss

be liable for such a tax. The discrimination claimed is not
present for the rule here announced applies to American
citizens who are nonresidents of the United States and
domiciled in Great Britain as well as to citizens there domi-
ciled of Great Britain itself. Besides, it seems peculiarly
proper at this juncture to follow our own decisions until
the federal courts rule that such taxation is without the
power of the state.
The order appealed from is reversed.

Curtis, J., Langdon, J., Waste, C. J., Thompson, J., Shenk,
J., and Seawell, J., concurred.

{S. F. No, 14848. In Bank.—February 1, 1934.]

MRS. STEPHANNA POTTER, Appellant, v. CONTRA
COSTA REALTY COMPANY (a Corporation), Re-
spondent.

Lovett K. Fraser for Appellant.
Esmond Schapiro for Respondent.

LANGDON, J.—This is an action to recover money paid
under a contract after its rescission. Plaintiff on February
11, 1916, contracted to purchase from the predecessor of
‘defendant company, two lots in a subdivision in Martinez,
for $1,000, payable in installments. Plaintiff lived some
distance away and had never seen the lots. The contract
provided that during the life of the agreement the vendor
should pay state and county taxes based upon the then
assessed valuation, and that the purchaser should pay excess
state and county taxes, and all sanitary and other assess-
ments. The vendor further agreed to grade the street, in-
stall water mains, and put in a cement sidewalk at its own
expense. On December 12, 1921, plaintiff completed her
payments of $1,000, and wrote defendant requesting a deed.
Early in 1922 defendant replied that a deed would be de-
livered on return of the contract. Plaintiff replied that she
had mislaid it. Later, under date of April 25, 1923, she
wrote that she had visited Martinez and found no side-
walks there. She also again requested a deed. Defendant
replied on April 27, 1928, that the company would install
the water mains at any time she desired, and on November
21, 1928, in response to another inquiry, defendant wrote
that it would construct the sidewalk. After further delays
defendant wrote plaintiff on April 18, 1926, stating that
lot owners were in the habit of putting in sidewalks them-

=:
selves when they built, that the sidewalks cost $52,50, that
she owed a balance of $23.47 for certain’ charges, and that
upon receipt of. her contract they would give her a deed,
eredit her with the sum of $23.47, and pay her the difference
of $29.08, following which she could put in her own side-
walk. The letter also offered the alternative of her paying
the sum of $23.47 at once,‘and receiving from defendant a
deed and ‘‘a letter of credit for the sidewalk’’, Plaintiff
made no answer. On July 19, 1929, defendant wrote plain-
tiff that it would insist upon strict performance of the
contract, that there was overdue a balance of $118.81 (for
taxes and assessments paid), and that unless all was paid
by July 29, 1929, the contract would be terminated and
prior payments forfeited. On November 14, 1929, plaintiff
wrote defendant, giving notice of rescission of the contract,
and demanding the return of the $1,000 with interest. De-
fendant refused to comply with the demand, and this suit
was brought. Defendant cross-complained for the taxes
and assessments paid.

The trial court found that defendant had failed to con-
struct the sidewalks as required by the contract, but held
that plaintiff was guilty of laches, which barred her right
to rescind. Its decree was that plaintiff take nothing, and
that her interest in the property be forfeited unless she
paid the sum of $89.56 (for taxes and assessments) to de-
fendant within thirty days from service of notice of entry
of judgment. Costs were awarded to defendant. Plaintiff
appealed,

HI The judgment is sought to be justified upon the
equitable principle of laches, but it derives no support from
that doctrine. The undisputed facts show that plaintiff
fully performed all conditions of the contract; that defend-
ant failed to perform a material’ covenant; that defendant
in the course of the negotiations promised to fulfill its
obligations, and did not, until 1929, in any way repudiate
the same. That she-had a right to rescind for failure of
consideration is clear, and she did not lose that right by
her indulgence of defendant in reliance upon its promise to
perform. (See, generally, Mills v. Richmond Co., 63 Cal.
App. 594 [219 Pac. 465]; Walker v. Harbor Blocks Co.,
181 Cal. 773 [186 Pac. 356]; Grotheer v. Panama Pacific
Land Co. 41 Cal. App. 19 [181 Pac. 667].)

a

a4 ees 0

HH The doctrine of laches bars equitable relief where the
party seeking relief has been guilty of excessive, unjustified
delay in asserting rights, but delay is justified where it
results from negotiations to reach a settlement of the con-
troversy, and this must be particularly true where the
defaulting party represents that he will make good his de-
fault. (See Sherratt v, Hellman Com. T, & 8. Bank, 112
Cal. App. 542 [297 Pae. 582].)

HI Plaintiff was entitled to rescind and did rescind
the agreement. It follows that she is entitled to the return
of the sum of $1,000, together with interest. Since defend-
ant retains the property, this disposes of its cross-demand
for taxes and assessments.

The judgment is reversed, with directions to the trial
court to enter judgment for plaintiff in accordance with
the conclusions expressed in this opinion.

Preston, J., Curtis, J., Thompson, J., Seawell, J.,
Spence, J., pro tem., and Waste, C. J., concurred.

Rehearing denied.
a

[8. F. No, 14971, In Bank—February 1, 1934,]

DOROTHY TITCOMB, Petitioner, vy. SUPERIOR COURT
OF SANTA CLARA COUNTY et al., Respondents.

rx)
a

Paul Nourse and Thomas V. Cassidy for Petitioner.
E. L. Maxwell and Newby & Newby for Respondents.

SEAWELL, J.—This is a proceeding in certiorari to
review certain orders of the Superior Court of Santa Clara
County entered in a proceeding brought by A. A. Trippel
to obtain custody of his two minor children, a boy and girl,
aged respectively twelve and ten years, issue of his mar-
riage with petitioner herein, Dorothy Trippel, also known
as Dorothy Titecomb. By said orders, which were entered

es a1

ex parte without notice to petitioner Dorothy Trippel, the
court deereed that A. A. Trippel should have the custody
of said children pending hearing on his application for
permanent custody, and thereafter said court cited peti-
tioner herein to show cause why she should not be punished
for contempt for disobedience of said custody orders and
unlawful interference with their execution. After grant-
ing the writ of review this court stayed further proceedings
in respondent court, and thereby restrained further prosecu-
tion of the contempt hearing. .

The parties were married in the state of Arizona in 1919,
and resided in that state several years before removing to
California. They separated in September, 1928, and Mrs.
Trippel thereafter brought suit for divorce in the county of
Los Angeles. An interlocutory decree was entered in her
favor, and the custody of the children awarded to her,
with permission to take them to the home of her parents
in Arizona. A final decree of divorce was never entered in
said action.

Dorothy Trippel alleges in her petition for writ of review
filed herein that she obtained a divorce from A. A. Trippel
in Santa Cruz County, state of Arizona, on December 5,
1931, Said decree made no provision for the custody of
the children, who were then in California. Prior to the
commencement of the divorce action, A. A. Trippel had
brought a proceeding in Arizona to obtain custody of the
children, and in said proceeding the court of Cochise
County, by decree rendered on June 26, 1931, had awarded
the mother custody for nine months of the year, and the
father custody for the three months of June, July and
August of each year, with the provision that if either party
should violate any provision of the decree such party should
forfeit all right to custody. On September 1, 1931, A. A.
Trippel failed to return the children to petitioner, but prior
thereto, in violation of the express provision of the custody
decree, removed them to California, and brought an action
for divorce in the Superior Court of Sacramento County
in 1982. In said action he prayed that the custody of the
children be awarded to him. Petitioner procured extradi-
tion of A. A. Trippel from California to Arizona on a
charge of kidnaping the children, He appeared before the

38 ee

court in Cochise County and was adjudged guilty of con-
tempt. On June 1, 1932, said court, with the children
present in person, found that A, A. Trippel had forfeited
all eustody rights, and ordered that Dorothy Trippel have
continuous custody. On August 27, 1932, said court granted
her permission to remove the children to California. The
several Arizona decrees and orders referred to in the peti-
tion for review are annexed to said petition as exhibits.

On April 6, 1988, A. A. Trippel filed an application in the
Superior Court of Santa Clara County praying that per-
manent custody of the two children be awarded to him,
and that Dorothy Trippel be cited to show cause why his
application should not be granted. He alleges therein that
he and Dorothy Trippel ‘‘are married, and not legally
divorced, and that they are living separate and apart’’.
On information and belief he alleges that the children are
not now in the ‘‘legal custody’’ of their mother, and that
they are in Los Angeles County. He does not allege that
he is a resident of Santa Clara County, or make any aver-
ment whatsoever as to his place of residence. Notwith-
standing the father’s application contained no prayer for
custody pending hearing, the court made an ex parte order
on the day the application was filed that the father have cus-
tody pending the hearing of the application, and on April
18th, seven days later, made a further ew parte order that
the sheriff of Los Angeles County forthwith obtain said
minors and deliver them into the custody of A. A. Trippel.
On May Ist, said court ordered that Dorothy Trippel be
cited to show cause why she should not be punished for con-
tempt for unlawful interference with the execution of said
custody orders. She thereafter filed a special appearance,
through her attorney, objecting that the Santa Clara County
eourt had no jurisdiction of said minors, which objection
was overruled. It appears from the record of a partial
hearing held on July 25, 1933, before this court had granted
a stay of proceedings, that prior thereto the children had
een removed to Arizona by their mother.

We are of the view that the ex parte custody orders in the
circumstances appearing from the record herein are void
and in excess of the jurisdiction of the court. Before con-
sidering the grounds which render said orders invalid, it is

es 39

pertinent to make certain preliminary observations regard-
ing the custody proceedings herein.
It is apparent from the allegations of A. A. Trippel’s

. application for custody, to the effect that he and his wife

are ‘‘not legally divoreed’’ and the children are not in the
“legal eustody’’ of their mother, that he proposes to attack
the legality of the Arizona divorce and custody decrees.
As noted above, the divorce decree made no provision for
the custody of the children. [J It must be conceded that
although the Arizona divorce and custody decrees were in
all respects valid, the courts of the state of California would
nevertheless have jurisdiction upon the children thereafter
becoming residents or inhabitants of this state to determine
their custody in accordance with their best welfare. (De
La Montanya v. De La Montanya, 112 Cal. 101, 116 [44
Pac. 345, 58 Am. St. Rep. 165, 32 L. R. A. 82]; Anthony
v. Tarpley, 45 Cal. App. 72 [187 Pac. 779].) It is of the
inherent nature of custody decrees, whether entered in di-
voree proceedings or independently thereof, that they are not
final and conclusive, but subject to modification in the state
where rendered as circumstances change. [J Where chil-
dren whose custody has been the subject of judicial inquiry
in another state subsequently become residents or inhabitants
of this state, they are subject to the supervisory jurisdiction
and guardianship of this state, to be exercised for their
protection. The paramount concern in awarding custody
as between parents is the welfare of the child, who is not
the property of his parents. If it appears that the cireum-
stances upon which the prior order of another state is based
have not changed, our courts, on principles of comity, may
refuse to decree a change of custody, but the decree of the
other state is never a bar to inquiry as to the best interests
of the child. (In re Wenman, 33 Cal. App. 592 [165 Pac.
1024].)

’ It follows in the case herein that the right of this state
to inquire into the custody of the minors, provided they are
residents or inhabitants of this state, does not depend upon
the Arizona custody decrees being subject to collateral
attack on jurisdictional grounds. Nor does the right to
maintain a custody proceeding in this state depend upon
the validity or invalidity on jurisdictional grounds of the
Arizona divorce decree. Although A. A. Trippel by alleg-

40 Le |

ing that he and his wife are ‘‘not legally divorced’’, but
living separate and apart, no doubt intended to invoke
the provisions of section 214 of the Civil Code, providing
for inquiry into the custody of children when the parents
live in a state of separation without being divorced, a fail-
ure to establish his allegation that they were not legally
divorced would not bar a custody decree. The courts of this
state, as indicated above, have inherent jurisdiction without
express statutory provision therefor to inquire into the
eustody of children resident in this state, although their
parents may have been validly divorced in another state,
either with or without provision for custody of the children
of the marriage.

Hl Petitioner Dorothy Trippel contends that our courts
are without jurisdiction to take children from the custody
of one parent and award them to the other parent by
ex parte order entered without notice and hearing. In the
absence of a judicial adjudication, the mother has equal
rights with the father to the custody of their children while
they live in a state of separation. (Sec, 198, Civ. Code.)
There can be no doubt that our courts are without jurisdic-
tion to make a permanent custody order taking the child
from the mother without hearing and notice (Ex parte
Beckmell, 119 Cal. 496 [51 Pac. 692]; In re Dahnke, 64 Cal.
App. 555 [222 Pac. 881]; In re Arkle, 98 Cal. App. 404
[269 Pac. 689]; note, 76 A. L. R. 242), but the question
herein is whether under any circumstances jurisdiction
exists to make an ex parte order for temporary custody
pending hearing. We are of the view that such a power
exists where necessary for the protection of the child, whose
welfare is the paramount consideration in these proceedings.

Section 1442 of the Probate Code (formerly 1747 of
the Code Civ. Proe.), provides that in a guardianship proceed-
ing ‘‘when it appears to the court or judge either from a
verified petition or from affidavits, that the welfare of the
minor will be imperiled if he is allowed to remain in the cus-
tody of the person then having his care, an order may be
made providing for his temporary custody until a hearing
can be had on the petition. And when it appears that there
is reason to believe that the minor will be carried out of the
jurisdiction of the court, or will suffer irreparable injury
before compliance with such order providing for the tem-

ee a

porary custody of the minor can be enforced, the court
or judge, at the time of making the order for temporary
custody, may cause a warrant to be issued, reciting the facts,
and directed to the sheriff, coroner, or a constable of the
county, commanding such officer to take the, minor from
the custody of the person in whose care he then is and place
him in custody in accordance with such order’. This sec-
tion applies in proceedings brought by one parent claiming
guardianship adversely to the other parent. A decree
awarding custody to a parent claiming adversely to the other
parent differs only in formal respects from a decree ap-
pointing one parent guardian of the person of the child.
The effect in either case is to confer upon the party ap-
pointed the care and custody of the child. We regard sec-
tion 1442 as plainly applicable where a parent seeks custody
of the child—that is, his guardianship—through a custody
order, as well as where he prays for issuance of letters’ of
guardianship on the person of the child.

Although the contrary view has been expressed in another
jurisdiction (Gitsch v. Wright, 61 Utah, 175 [211 Pac.
705]), we are of the opinion that even in the absence of
express statutory authorization the courts of this state
would have inherent power, either where letters of guardian-
ship are prayed for or where the prayer is for custody,
to take the child from the person having its care by such
a temporary custody order as is provided for in section 1442
of the Probate Code. This follows from the premise that the
controlling factor is the welfare of the child, rather than
the rights of those claiming its custody. This summary
power should be exercised with extreme caution where the
child is in the care of the other parent.

Although petitioner Dorothy Trippel cannot succeed in
her contentions urged as to the questions above discussed,
her claim that the two ea parte custody orders entered by
the Superior Court of Santa Clara County are, in the
particular circumstances of this case, void and in excess of
the jurisdiction of the court, must be sustained.

Upon an examination of the provisions of our law
relating to the guardianship and custody of minor chil-
dren, we find that jurisdiction of our superior courts de-
pends upon the child being an inhabitant or resident of the
county. Section 1440 of the Probate Code, confers juris-

42 Pe |

diction to appoint a guardian of the person of a minor
on the superior court of the county in which the minor
‘‘vesides or is temporarily domiciled’’. Petitions filed under
the Juvenile Court Act (2 Deering’s Gen. Laws, 1931,
p. 2079, see. 8) must show that the minor ‘‘is within the
county, or residing therein’. The right of the court of the
county of which the minor is an inhabitant to entertain a
custody or guardianship proceeding, notwithstanding his
legal residence is elsewhere, has been sustained repeatedly.
(Ricci v. Superior Court, 107 Cal. App. 395 [290 Pae, 517];
In re Green, 67 Cal. App. 504 [226 Pac. 76]; Collins v.
Superior Court, 52 Cal. App. 579 [199 Pac. 352].) The
statutory provisions as to jurisdiction in guardianship and
custody proceedings are legislative enactments of well-
settled jurisdictional principles. The requirement as to
the child being a resident or inhabitant of the county where
the proceeding is instituted is jurisdictional in nature. In
De La Montanya v. De La Montanya, 112 Cal. 131, 133
[44 Pac. 354], it is declared that jurisdiction to appoint
a guardian for infants under the American system is
entirely local.

HH Im the case herein there is no contention that the
two minor children were ever actually resident, in the
sense of being physically present, in Santa Clara County.
A. A. Trippel alleged in his application for custody that
they were in Los Angeles County. The jurisdiction of the
Santa Clara County court to adjudicate their eustody must,
if it is to exist, be predicated upon their being legally resi-
dent in said county by virtue of the fiction of law that the
residence of the father is the residence of the minor child.
This fiction could prevail only on the theory that the father
was resident in said county, and that the Arizona decrees
awarding custody to the mother were invalid and in excess
of the jurisdiction of the Arizona court. (Sec. 52, Pol.
Code.) Otherwise, the residence of the mother, admittedly
in Los Angeles when the custody application was filed,
would determine the residence of the children. (Sec. 213,
Civ. Code; sec. 1500, Probate Code.)

It was held in De La Montanya v. De La Montanya, 112
Cal. 101 [44 Pac. 345, 58 Am. St. Rep. 165, 32 L. R. A.
82], and Id. 112 Cal. 181 [44 Pac. 354], that where the
children whose custody and guardianship are sought to be

Eee 43

adjudicated are absent from the state, together with their
father, when the proceeding is commenced and continuously
thereafter, their custody cannot be determined, although
their legal residence or domicile is in the county in this
state wherein the proceeding is brought. The question
whether the county of the father’s residence, where it is
the legal residence of the child, can entertain a proceeding
for custody or guardianship, and wpon securing the pres-
ence of the child within the jurisdiction by citation to pro-
duce him directed to the mother within the state, adjudicate
custody or guardianship, although said minor is not and
never has actually resided in said county, but has actually
resided with his mother in another county in this state, does
not seem to have been decided. It is not necessary to decide
this question in the case herein, for the reason that the
father’s application for custody contains no allegation that
he is or ever has been a resident of Santa Clara County,
or any allegation whatsoever as to his place of residence,
and the transeript of evidence introduced upon the partial
hearing held on July 25, 1933, which is embodied in the
return to the writ of review, reveals that he was not at the
date of the filing of the application, or at the date of
said hearing a resident of Santa Clara County, and that he
never had been a resident of said county. The most that
can be said is that he may intend some time in the future
to take up his residence in said county. Therefore, on no
theory could the two minor children herein be residents of
Santa Clara County.

Hl In the answer to the petition for writ of review it
is contended that the failure of the application for custody,
or the ex parte orders based thereon, to recite the jurisdic-
tional facts did not render said orders void; that insuffi-
ciency of the pleadings or findings goes to the jurisdiction
of the court only in certain proceedings, which, unlike cus-
tody and guardianship proceedings, are purely statutory and
unknown to the common law. (Chollar Min. Co. v. Wilson,
66 Cal. 374 [5 Pac. 670]; Elberta Oil Co. v. Superior Court,
74 Cal. App. 114 [239 Pac. 415].)

The answer to respondent’s contention is that the verified
application upon which the ex parte orders are based is some-
thing more than a pleading. By section 1442 of the Probate
Code, the summary ex parte order for temporary custody

44 PC |

is authorized to be entered only upon a verified application
or affidavits from which it appears that the welfare of the
minor is imperiled, and a warrant to procure the minor
is. authorized upon a showing that there is reason to
believe that the minor will be carried out of the jurisdiction,
or suffer irreparable injury. Although not expressly stated
in section 1442, the jurisdictional fact of the minor’s resi-
dence in the county should also be averred in the verified
petition or affidavits. The verified petition or affidavits
are a form of evidence, which is permitted, in the necessities
of the case, to establish the jurisdictional facts in lieu of
their proof at a hearing held upon notice. It is the rule
that the sufficiency of the evidence to establish the jurisdic-
tional facts may always be inquired into in proceedings in
certiorari. (4 Cal. Jur. 1110; Stumpf v. Board of Super-
visors, 181 Cal. 864 [63 Pac. 663, 82 Am. St. Rep. 850];
Dreher v. Superior Court, 124 Cal. App. 469 [12 Pac. (2d)
671].) Where, in the exigencies of the case, such facts
are required to be established by evidence of a particular
kind, as in the instant case by affidavit or verified petition
in the nature of an affidavit, and such affidavit or petition
wholly fails to establish the residence of the minors in the
county of Santa Clara, the ex parte orders based thereon
are void, and will be annulled on certiorari. Even in the
absence of a particular statute we are of the view that a
court in exercising supervisory jurisdiction over children
would be without right to make a summary ea parte custody
order taking the children from the care of their mother with-
out proof by affidavit or by verified petition of the jurisdic-
tional facts and a showing of the necessity therefor.

In the ease herein not only is there a failure to show
the jurisdictional facts as to the residence of the minors, but
the application fails to allege -that the welfare of the
children will be imperiled if they are allowed to remain
with the mother pending hearing, or that the applicant has
reason to. believe they will be carried from the jurisdiction,
or to set forth facts from which these requisites may be
inferred. The father does not even pray for an order for
temporary custody. The right of the court to take the
custody of the children from their mother by ex parte
order is a summary emergency measure, and the require-

eS 4%

ment that the affidavits or verified petition make a showing *
of necessity therefor is jurisdictional.

As noted above, on July 25, 1933, a partial hearing
was had in the Superior Court of Santa Clara County on
the father’s application for custody before issuance of the
writ of review and stay by this court, and a transcript of
the proceedings taken at said hearing has been made a
part of the return to the writ of review. During the course
of said hearing, A. A. Trippel filed an amended application
for custody, wherein he averred that he was an inhabitant
of California, resident in the county of Santa Clara. Said
amended application would not validate the void ea parte
eustody orders entered several months previously, or give
vitality to the contempt proceedings based on said orders.
(In re Dahnke, 64 Cal. App. 555, 566 [222 Pac. 381].)
Furthermore, as noted above, it conclusively appears from
the testimony of A. A. Trippel elicited on eross-examination
by counsel for Dorothy Trippel, that he was not at the date
of filing the application or at the date of the hearing a
resident of Santa Clara County, and that he never had been
a resident of said county, but giving the broadest possible
interpretation to the evidence, the most that can be said
is that he has an intent to take up his residence in said

. county some time in the future. The court should have
granted the motion of counsel for Dorothy Trippel to dis-
miss the action on the ground that it was improperly
brought in Santa Clara County. Petitioner Dorothy Trip-
pel applied to this court for a writ of prohibition as well
as for a writ of review. We granted the writ of review,
on the theory that full relief could be afforded to her
through said writ. In reviewing the proceedings in the
court below upon said writ, we find that the custody pro-
ceeding initiated on April 6, 1933, should be dismissed, and
in annulling the two ex parte orders and the contempt order
based thereon, it is competent for this court to prohibit
further prosecution of said custody proceeding and direct
the court below to dismiss said proceeding.

In this proceeding in review the question of the relative
fitness of the parents to have the care of their minor children
is not involved. Before the court below had completed
its inquiry into that subject the stay of proceedings issued
from this court. The mother was not present at the hear-

46 a —

-ing of July 25th, and no testimony was offered in her
behalf. Suffice it to say, that if she were guilty of the acts
of gross immorality with which A. A. Trippel charges her
over a period of years commencing while they were still
living together as husband and wife, it is inconceivable that
the Arizona court would have sustained her right to custody
when it was challenged. .

The custody orders of April 6, 1933, and April 18, 1938,
and the order’ and citation for contempt are annulled and
set aside, and further prosecution of the custody proceed-
ing commenced on April 6th is prohibited, and the court
below directed to dismiss said proceeding.

Curtis, J., Langdon, J., Preston, J., and Waste, C. J.,
coneurred,

[S. F. No, 14494, In Bank—February 1, 1984.]

T. J. HALLINAN, Appellant, v. KIRK H. PRINDLE et
al., Respondents.

Vincent W. Hallinan, Joseph J. Bullock, C. K. Bonestell,
Felix M. Cunningham and Michael Riordan for Appellant.

Hartley F. Peart, Hadsell, Sweet & Ingalls, Redman,
Alexander & Bacon, Ross & Ross and Herbert Chamberlin
for Respondents,

THE COURT.—On and prior to December 7, 1929, Kirk
H. Prindle was a licensed physician and surgeon of this
state, practicing his profession in San Mateo County, and
having an association with the Church of St. Matthew Mills
Memorial Hospital and also with Dr. Chidester, medical
superintendent and director of said hospital, which institu-
tion will hereafter be referred to as the hospital. Ann H.
MacKinnon had been in the employ of the hospital as a nurse
approximately one year and a half at the time plaintiff sus-
tained the physical injury for which damages were sought
against the defendants. She was in charge of the emergency
room and also had charge of the preparation of the rooms
in which minor operations were performed. No other qualifi-
cation or experience is shown.

, Chureh of St. Matthew Mills Memorial Hospital is a
corporation existing under the laws of this state and its prin-
cipal place of business is at the city of San Mateo. It was
incorporated in November, 1911, in the name of the Church
of St. Matthew Red Cross Hospital. The original articles of
incorporation declare that the incorporators ‘‘voluntarily
associate themselves together for the purpose of incorporat-
ing a private corporation’? and that the purposes for which
it is formed are ‘‘to conduct and maintain’’ said hospital
“established in the city of San Mateo... by Elizabeth
Mills Reid; and to establish and maintain in connection
therewith a school or schools for the training of nurses for the
eare of the sick; and to acquire, hold and own property and
to receive gifts, bequests and devises for the conduct and
maintenance of the said hospital and schools.’? On June 9,
1921, upon petition of the directors to the Superior Court
of the County of San Mateo, the name of said hospital was
changed to Church of St. Matthew Mills Memorial Hospital
and the business of the hospital has since been conducted

; Le 49

in the latter name. The reasons given for the change of
name are: First, that the hospital which said corporation
conducted was established by Elizabeth Mills Reid, and the
Church of St. Matthew and Mrs. Reid had from the time of
its establishment contributed to the support and maintenance
of said hospital and furthered financially and otherwise the
growth and use of the same; second, that the words ‘‘Red
Cross’? had ‘‘caused confusion in the minds of people not
accurately informed regarding the plan of its operation, one
of the most common misunderstandings regarding the method
of operation being that it is an institution maintained and
supported by the American Red Cross, and that it has some
connection with or is a part of the charitable institution and
organization known as the American Red Cross. That this
corporation has no connection with and is not a part of the
American Red Cross and is not supported nor maintained by
it, nor does it have or receive any financial aid or otherwise
from the American Red Cross’’.

The above contains all there is to be found in the articles
of incorporation bearing upon the question as to whether the
hospital was a charitable institution. Respondent hospital
contends that plaintiff comes within the rule that where one
accepts the benefit of a public or of a private charity, he ex-
empts by implied contract the benefactor from liability for
the negligence of the servants in administering the charity
if the benefactor has used due care in the selection of those
servants. [| The character of the corporation, however,
is to be determined not alone by its powers as defined in its
charter, but also by the method of transacting the business
of the hospital. (Stewart v. California Medical Missionary
& Benevolent Assn., 178 Cal. 418 [176 Pac. 46].) The evi-
dence on this phase of its character, while somewhat scant,
will be considered later.

The plaintiff, a married man, was manager of a title and
trust company, and a resident of Hillsborough, near the
locality in which the hospital is located. He had had his
appendix removed by Dr. Chidester at said hospital some
time before he was operated upon for the removal of a
cyst upon the exterior wall of the abdomen, out of which
operation this action arose. After the appendix operation
he consulted Dr. Chidester upon a condition of sterility and
was turned over by Dr. Chidester to Dr. Prindle, whom he

bn

understood to be the house physician and assistant of Dr.
Chidester. Plaintiff was advised by Dr. Prindle to have
the cyst removed and was assured that it would be a very
minor operation and would cause him no great inconvenience.
Accordingly plaintiff entered the hospital and Dr. Prindle
directed Ann H. MacKinnon, the nurse, to put the operat-
ing room in order and instructed her that he would use
novocaine as the local anesthetic. Instead of furnishing
novocaine as the anesthetic to be injected, she prepared and
brought to the surgeon a solution of formalin, admitted to
be a highly dangerous caustic and corrosive fluid which
rapidly destroys the flesh and bodily tissues. Supposing
the solution so furnished to be novocaine, without making
an investigation for himself, he injected the formalin solution
into plaintiff’s abdomen and upon observing a violent reac-
tion upon the part of the patient he discovered the mistake
and immediately injected novocaine into the area in which
he had previously injected formalin, and also removed by
incision, as far as possible, the area affected by formalin.
That the corrosive substance destroyed quite an area of flesh
and tissue of the body and caused the plaintiff to suffer
great pain during the slow healing process there can be no
doubt. As to the permanency of the damage suffered by
reason of the burns which he received from said injection
there is a conflict in the evidence.

Plaintiff by his action for damages suffered by reason
of said negligence joined the hospital, the physician and
nurse as tort-feasors. He alleged that the hospital was
managed and operated for hire and that the nurse was the
employee of Dr. Prindle and the hospital. The acts con-
stituting negligence as to each participant are set forth in
painstaking detail and the pain suffered by plaintiff and the
probable effect of said injuries upon his organism are
meticulously set forth. It is pertinent to observe here that
by reason of the allegations of the complaint as to the
manner in which the tort was committed and the evidence
introduced by plaintiff—including the examination of the de-
fendant physician—the doctrine of res ipsa loquitur, invoked
by plaintiff, was eliminated from the case by the affirmative
showing made by plaintiff as to the manner in which the
injuries were inflicted, even if this were a case in which

SS 51

the doctrine might otherwise have been properly applied,
which question we do not decide.

The principal point presented by appellant goes to the
substance of ‘the verdict and the refusal of the court to
return the jury to the jury-room with directions to correct
or make clear an enigmatical verdict, and its refusal there-
after to enter a judgment against all three defendants in the
sum of $10,000, that being the amount of damages which
the jury found plaintiff had suffered as set forth in the ver-
dict returned as against the hospital. Said verdict was as fol-
lows: ‘‘We the jury in the above entitled cause find for the
plaintiff as follows: Against Kirk H. Prindle in the sum of
$ No dollars. Against Church of St. Matthew Mills Memo-
rial Hospital, a corporation, in the sum of $10,000. Against
Ann MacKinnon in the sum of $ No dollars.”’ Before pre-
senting its verdict the jury returned for instructions as to
whether it would be permissible to find in different amounts
against the several defendants. That is, whether, if it found
all several defendants joint participants in the commission
of a tort, but believed one or two less culpable than the
other—or the others—it could apportion the amount of
damages according to the degree of culpability which it
should find that each particular defendant’s participation
therein merited. There seemed to have been some confu-
sion in the mind of the court as to the exact information the
jury desired, but it was finally instructed that it could not
apportion the damages, and it again retired to the jury-room.
Soon thereafter it returned with the verdict above set out.
Upon receiving the verdict the court ordered it recorded.
Immediately after the verdict had been read as recorded,
Mr. Hallinan, appellant’s counsel, addressing the court,
moved the court to return the jury to the jury-roo. He
contended that the verdict was void for the reason that
the jury could not apportion the damages, as he contended
it had attempted to do by the verdict returned. His eonten-
tion was that the verdict was in effect a verdict against all of
the defendants and the jury should be instructed to specifi-
cally find against the other two defendants in the same sum
as it found against the hospital, to wit: In the sum of
$10,000. Counsel for the other respective defendants- ob-
jected to a reconsideration of the verdict. Quite a colloquy
took place between Mr. Hallinan and the court as to what the

52 | |

procedure should be. Mr. Iallinan said to the court that
the verdict. was void and the jury should be given an oppor-
tunity to correct it. The court replied that he did not have
the power to do it and expressed regret that he had no such
power. Mr. Hallinan replied that the court had the power
to correct the verdict. The court thereupon said: ‘‘Now the
case is over, I will say that I agree with you that it is not
a proper verdict to render, but it has been rendered and I
shall not direct them to render any other verdict,’’? and it
thereupon dismissed the jury. Shortly before the final argu-
ments commenced the court inquired of counsel the time they
desired to present their arguments to the jury, whereupon
the following occurred:

“Mr. Bacon: I really do not know. I had a motion I-
think that would be in order at this time on behalf of the
hospital, under the decision—

“The Court: A motion for a non-suit?

“Mr. Bacon: A directed verdict.

“The Court: I would rather that comes up later on, maybe
after the jury has returned the verdict, not now.”

Nothing further was done in the matter until the court
reconvened the following day. The jury was dismissed on
the previous day. Plaintiff contended that the verdict was
against all the defendants and the damage suffered by plain-
tiff had been definitely fixed by the jury at $10,000, and
therefore it became the duty of the court to assess a like
amount against all the joint tort-feasors. This motion was
denied. The attorneys for the hospital suggested to the
court that they had requested permission of the court on the
day before to make a motion at this time (the day follow-
ing) for a directed verdict in favor of the hospital notwith-
standing the verdict, as provided by section 629 of the Code
of Civil Procedure, reserving the right to move for a new trial
in the event the motion was denied. They thereupon asked
the court to enter a judgment in favor of the hospital not-
withstanding the verdict rendered against it. The ground
of the motion as then and there stated was that the evidence
showed that the hospital was a charitable institution and
that due care had been used in the selection of its employees
and nurse. The insufficiency of the evidence was urged as a
ground for entering said judgment. The attorney for the
nurse requested, in view of the form of the verdict, that

Se 58

judgment be entered in her favor on the ground that the
jury so indicated by its verdict. The attorney for the physi-
cian also moved for judgment notwithstanding the verdict,
on the ground of insufficiency of evidence to support a judg-
ment against him. The court summarily held that the ver-
dict was in his favor and he had no ground of complaint.
The learned judge further said that there was much merit
in the motion made on behalf of the hospital. He also ex-
pressed himself as not in sympathy with the verdict and
thought it absolutely wrong, but it was not the time to pass
upon it as the matter would all come up on motion for a
new trial.

HI The motion made on behalf of the hospital for judg-
ment notwithstanding the verdict was granted. This was
error. The hospital did not at any time move for a directed
verdict. As shown by the above quotation from the record,
its attorney thought that such a motion ‘‘would be in order’,
but the court remarked that he would prefer that that matter
come up after the jury returned its verdict. Here the mat-
ter was dropped and no motion for a directed verdict was
made. It is obvious that the motion could have been noth-
ing more than a belated gesture after the jury had performed
its office and had been dismissed. This point was definitely
settled in the Estate of Caldwell, 216 Cal. 694 [16 Pac. (2d)
139], citing a long list of authorities, including Estate of
Easton, 118 Cal. App. 659 [5 Pac. (2d) 635]; Estate of
Yale, 214 Cal. 115 [4 Pace. (2d) 153]; Estate of Fleming,
199 Cal. 750 [251 Pac. 637]. The Caldwell case holds that
the making of a motion for a directed verdict is a condition
precedent to the entry of judgment non obstante veredicto.
(Sec. 629, Code Civ. Proc.) The situation discussed in that
ease is very close in all material respects to the situation in
the instant case. There the attorney. expressed his intention
of asking for a directed verdict. The judge there, as here,
said he preferred to let the case go to the jury and that he
would exercise his prerogative after the jury passed on the
matter. [J This court said: “This statement of respond-
ents’ counsel was not a motion for an instructed verdict. A
motion is an application for an order (sec. 1008, Code Civ.
Proe.) and counsel’s statement of what he intended to do was
not an application for an order. Neither can the language
of the court, though indicating perhaps that his opinion on

5a ee —

the facts favored the cause of respondents, be considered an
order. An order is a direction of a court or judge, made or
entered in writing, and not included in a judgment. (See.
1003, Code Civ. Proc.)” [J A requested instruction for
a directed verdict is not a compliance with the requirements
of said section 629. (Estate of Caldwell, supra.) ‘‘The
main purpose of the statute in requiring such a motion to be
made as a condition precedent to the exercise of the court’s
power to render judgment non obstante veredicto is to give
the party against whom the motion is directed an oppor-
tunity to introduce further and additional evidence he may
have at hand to overcome the grounds of the motion.’’
(Estate of Caldwell, supra; Estate of Easton, supra.)
(Italics ours.)

The court was therefore without power to render
judgment in favor of the hospital, as no motion was made,
and consequently no opportunity was given to appellant to
offer evidence to supply whatever defects the moving party
may have pointed out. The court may have granted a new
trial, if so advised, after the entry of judgment in conform-
ity with the verdict. This was the limit of its power. The
verdict was so unusual in form and substance as to have con-
fused the court and all the attorneys engaged in the trial
of the cause. Even the attorney for the nurse, who claimed
the verdict acquitted her of all liability, moved to make the
judgment more certain in her favor. The attorneys for
Dr. Prindle, who now claim the verdict was in their client’s
favor, gave notice of appeal from the judgment as entered
upon the verdict to the first appellate district, ‘‘from the
judgment made and entered in the above entitled action on
the 4th day of June, 1931, in favor of plaintiff and against
defendant Kirk H. Prindle’’. (Italics ours.) They also
gave notice to the county clerk to prepare the record on
appeal.

HE Appellant contends that it was the jury’s effort to
exculpate the nurse and the physician, who, he contends,
were joint tort-feasors and mulct the hospital for the entire
damages. Unquestionably this is true as to the nurse. She
was called by the plaintiff as a witness and admitted that
she took from a medicine cabinet containing a number of
other bottles, some of which contained dangerous corrosive
substances, and without looking at the label of said bottle,

ee 36

or otherwise making any kind of examination as to the con-
tents of said bottle, the one containing formalin and pre-
pared the solution which was injected as an anesthetic. It
is the testimony of both the nurse and the physician that
formalin, which is a solution of formaldehyde, gives out an
exceedingly sharp, penetrating odor. The only suggested
mitigating cireumstance which she offered in her defense was
that the operating room contained such odors as are ordi-
narily present in an operating room, and that said odors
had a tendency to neutralize the formalin odor. The bottles
in the cabinet were labeled, and when asked if she read the
label before pouring the fiuid into the glass for use she an-
swered: ‘‘I hardly could have read it and poured out the
formalin.’’? She made no defense to the action, but never-
theless the verdict of the jury does not assess her with any
damages. As to her it reads: ‘Against Ann H. MacKinnon
in the sum of $No dollars.’? Did the jury mean to say that
notwithstanding her admissions of negligence and all the
other evidence corroborating her admissions that she was not
a participant in the tort, or did it conclude that she was
but the servant or employee of the hospital and that the
hospital for some undisclosed reason should bear the entire
award? The verdict cannot be explained on any legal
ground so far as the nurse’s liability is concerned. There
is not a scintilla of evidence to support a verdict in her
favor. The allegations of the complaint that she was negli-
gent in her duties were not contradicted. It would be an
anomaly and contrary to the decisions of this court to hold
her to be free of negligence and to hold the hospital, whose
agent she was, guilty of negligence. There is force in the
argument of appellant that the jury passed the matter of
liability for the tort on to her principal and, contrary to the
rule, did in effect forgive one admittedly a tort-feasor and
penalize the other. That the jury desired to apportion the
damages is made plain by the information which they re-
quested from the court as to whether they could return a ver-
dict fixing varying sums against the several defendants, or
whether ‘‘all would have to be alike’, After considerable
diseussion between court and jury they were told substan-
tially that in an action against tort-feasors the law will not
permit an apportionment of damages, since it will not at-
tempt to measure the degrees of culpability of the joint tort-

56 Le |

feasors. (Davis v. Hearst, 160 Cal. 148 [116 Pac. 530].)
Finding they could not apportion the damages the jury
placed the whole amount of damages assessed upon one of
the alleged tort-feasors. This in effect was a violation of
the principle laid down in Davis v. Hearst, supra, and many
other decisions.

The evidence as to the surgeon’s responsibility was a con-
tested matter. One ground of justification urged was that
it was the practice and custom of physicians practicing in
the community or locality in which he practiced and treated
appellant for the physician to accept without test or question
the anesthetic prepared by the nurse in charge of the opera-
tion in hand. It is contended by the appellant that the
pungent odor should have been detected by the operating
surgeon and that the nurse, although employed generally by
the hospital, was under the personal direction and conirol of
the surgeon and that she was selected by him as his assistant
and thereby the surgeon became responsible for her negli-
gence. Other issues are raised, but in view of the order
of retrial which we feel compelled to make under the state
of the record we express no opinion at this time as to the
effect of the evidence before us or which might be presented
in another trial. The hospital insists that it is exempt from
liability on the ground that it is a charitable institution
and therefore not responsible for the negligent acts of em-
ployees, provided it has used care in their selection. We
have set forth all there is in the charter bearing upon the
purposes of its incorporation, including its reason for chang-
ing the name made necessary to avoid the common mistake
that it was connected with the charity administered by the
American Red Cross, and also to honor the name of its
benefactor.

Evidence was offered tending to establish the charitable
character of the hospital on the one hand and counter-
evidence was offered tending to show it was operated for
profit even though the general purposes may have been
charitable. (Stewart v. California Medical etc, Assn., 178
Cal. 418 [176 Pac. 46].) A conflict exists as to this issue.

Hl Having pointed out reversible error in one or two
specific instances and considered the nondescript character
of the verdict, we are of the view that it is too incomprehen-
sible to support a judgment in favor of any of the parties to

a es 87

the action. The jury should have been returned to the jury-
room with instructions to reconsider and reframe their ver-
dict. We also feel that the examination of witnesses was too
strictly limited in several instances.

The judgment is therefore reversed as to each of the de-
fendants and the entire cause is set at large.

Rehearing denied.
||

[S. F. No. 14635. In Bank—WFebruary 1, 1934.]
ELLA GODFREY, Respondent, v. C. W. BROWN, Appellant.

iro}

a es 59

|
Rittenhouse & Snyder, Charles V. Barfield and Eldon B.
Spofford for Appellant,

Ford & Johnson, F. A. Cutler and Wyckoff, Gardner &
Parker for Respondent.

THE COURT.—Appeal from a judgment for the plaintiff
in an action to recover damages for personal injuries sus-
tained in a collision between two automobiles.

The plaintiff was riding as a guest in the rear seat of an
automobile driven by her brother, the defendant Brown.
Brown was driving easterly along Hubbard Street in the
city of Santa Cruz and approaching the intersection of that
street with Market Street. Hubbard Street enters Market
Street from the west, but it does not continue across the
intersection. Berkeley Way forms an intersection with
Market Street about fourteen feet southerly from the inter-
section formed almost opposite by Hubbard Street; that is,
the southerly boundary of Berkeley Way entering Market
Street from the east is about fourteen feet south of the
southerly boundary of Hubbard Street entering from the
west. Thus there is a fourteen-foot jog to the south on
Market Street for a driver entering Berkeley Way from
Hubbard Street.

On the. morning of January 29, 1928, the defendant
Brown, on Hubbard Street, was approaching its intersection
with Market Street at practically the same time the defend-
ant Cole on Market Street was approaching the southerly
boundary of Berkeley Way from the south. They saw each
other. Cole did not look again at Brown after he first
saw him, and slowed down, but picked up his speed and
continued across the intersection at a rate between twenty
and thirty miles an hour. Brown, still watching Cole, with-
out stopping or slowing down, continued straight ahead into

60 es —

the intersection. He applied no pressure on the brakes until
Cole had proceeded so far that the application was insuffi-
cient. to prevent the hooking of the left front of Brown’s
ear with the left rear of Cole’s bumper or fender. As a
result, Brown’s car was dragged by Cole’s and overturned
against the curb on the opposite side of Market Street. The
plaintiff was extricated in an unconscious condition and
received serious injuries. She sued the drivers of both cars.
The jury awarded a verdict of $7,500 against both defend-
ants. The defendant Brown alone appeals.

The injury occurred prior to the effective date of section
14184 of the California Vehicle Act, and the cause of action
based on negligence was therefore maintainable as against
the appellant. (Callet v. Alioto, 210 Cal. 65 [290 Pac.
438].)

Several alleged errors in the giving of and refusal to give
certain instructions and misconduct of counsel claimed to be
prejudicial to the rights of the appellant are urged as
grounds for reversal.

HI Toward the conclusion of the trial one of the jurors
asked whether the defendant Brown carried liability insur-
ance. The court told the jury that that was not a proper
question. Counsel for the defendant Brown made the state-
ment: ‘‘I would like to answer that but do not insist on it.””
The plaintifft’s counsel waived any objection to an auswer,
but no answer was made and the court instructed counsel to
proceed with the conduct of the trial. The defendant
Brown asked for an instruction admonishing the jury that
no insurance company was a party to or interested in the
outcome of the action. The court modified the instruction
to the effect that the only parties to or interested in the out-
come of the case were the plaintiff on the one hand and
Brown and Cole on the other. On this showing we con-
elude that the defendant Brown was not prejudiced. It is
further insisted, however, that when these proceedings took
place the plaintiff’s counsel giggled, chortled, smiled and
glanced knowingly at the jury for the evident purpose of
conveying an affirmative answer to the juror’s question.
These proceedings and conduct were presented to the trial
court in affidavits and counter-affidavits on a motion for a
new trial, which placed the alleged misconduct of counsel
in issue. We cannot say on the record presented that the

a es 6a

denial of the motion made on that ground was an abuse of
discretion.

Hi The court instructed the jury that at the time of
the accident the law provided that ‘‘Where two vehicles
approach an intersection of public highways at approxi-
mately the same time the vehicle approaching from the right
shall have the right of way provided such vehicle is travel-
ing at a lawful rate of speed.’”? (Stats. 1925, p. 412.)
Further, that if Brown and Cole approached the intersec-
tion of Hubbard Street and Berkeley Way with ‘Market
Street at approximately the same time, and Cole was driving
at a lawful rate of speed, Cole had the right of way over
Brown approaching from the left and it was the duty of
Brown to yield the right of way. It is urged that this
instruction is ambiguous because it does not define the south
boundary of the intersection. The theory of counsel is that
if the southerly boundary of the intersection is an extension
of the southerly line of Hubbard Street, the defendant
Brown would have arrived at the intersection first and the
instruction would be erroneous. If the jury understood

‘from the instruction and from the map before it that an

extension of the southerly side of Berkeley Way constituted
the southerly boundary of the intersection of both cross
streets with Market Street, it was not an incorrect under-
standing. At this intersection with such a short jog into
the opposite street, a driver approaching Market Street from
Hubbard and intending either to make a left turn or to
proceed across into Berkeley Way is compelled to consider
the traffic flowing northerly on Market Street approaching
Berkeley Way before he executes his intention. There was
nothing erroneous, therefore, in the assumed definition of the
intersection. Furthermore, there is no showing that the de-
‘fendant Brown requested an instruction embodying a
definition of the boundaries of the intersection. He offered
an instruction on the same subject which incorporated the
word ‘‘reached’’. That word was changed to ‘‘approached’’
by the trial court and given as asked. No error can be
predicated on the modification in view of the provisions of
section 181 (a) of the California Vehicle Act then in force.
(Stats. 1925, p. 412.) The appellant also urges that the
instruction is incomplete inasmuch as it does not define the
defendants’ respective rights if it be found that the defend-

62 Le |

ant Brown entered the intersection first. The instruction
covered the subject of the subdivision as it then existed.
The defendant Brown did not request an instruction on the
claimed omission, nor did he incorporate any comment
thereon in the instruction on the same subject requested by
him and given by the court. If he desired such an instruc-
tion he should have made the appropriate request. Further-
more, it must be assumed that the jury understood that if
the facts stated in the instruction were not found, Cole did
not have the right of way. This is not inconsistent with the
result in the case of Keyes v. Hawley, 100 Cal. App. 53
[279 Pac. 674], cited by the appellant, where the evidence
was that the appellant’s car had entered the intersection
when his co-defendant’s car was several car lengths beyond
the intersection. In the present case the evidence without
substantial conflict is that both cars approachd the inter-
section as defined by the court at approximately the same
time.

HM The appellant questions the correctness of an in-
struction given which told the jury that an operator of an
automobile is not necessarily exempt from liability by simply
showing that he complied with the law relating to the rate
of speed, but that he still is bound to anticipate the presence
of other vehicular traffic, and that he must keep a ‘‘proper”’
lookout and keep his vehicle under such control as will
enable him to avoid a collision with another automobile
which is operated with reasonable care ‘‘and, if the situa-
tion requires, he must exercise reasonable care to slow up
and if reasonably necessary, stop’’. It is claimed that such
an instruction takes from the jury the question of what
constitutes ordinary care under the circumstances. This is
not the effect of the instruction. Whether or not slowing
up or stopping was necessary or reasonable and what was
the proper conduct of both defendants under the cireum-
stances was expressly left with the jury. Similar instruc-
tions have heretofore been approved. (Nichols v. Nelson,
80 Cal. App. 590 [252 Pac. 739]; Schatie v. Maurice, 116
Cal. App. 161 [2 Pace. (2d) 489].)

HM The only remaining contention is that the court
erred in applying the doctrine of res ipsa loquitur in the
ease. The court instructed the jury: ‘‘Where one is riding
in an automobile as an invited guest; and the driver of the

a ee 68

car is in the exclusive control thereof; and if it is shown
that the car, while being so driven, is overturned, the doc-
trine of res ipsa loquitur is applicable. That doctrine is
stated as follows: Where the thing is shown to be under the
management of the defendant, and the accident is such as in
the ordinary course of things does not happen, if those who
have the management use proper care, the fact of the acci-
dent affords reasonable evidence, in the absence of explana-
tion by the defendant, that the accident came from want of
eare.”’

The appellant cites Keller v. Cushman, 104 Cal. App.
186 [285 Pace. 399], Diamond v. Weyerhaeuser, 178 Cal.
540 [174 Pac. 38], Scellars v. Universal Service Co., 68 Cal.
252 [228 Pac. 879], and Harrison v. Sutter St. Ry. Co., 184
Cal. 549 [66 Pac, 787, 55 L. R. A. 608], to uphold the con-
tention advanced by him that where the plaintiff’s injury
results from a collision between two automobiles, the doc-
trine of res ipsa loquitur is not applicable, and an infer-
ence of negligence against the party in whose automobile the
plaintiff was riding as a guest does not arise. The basis
of the distinction sought to be made by the appellant, viz.,
that the circumstances surrounding the injury must be such
that there can be no reasonable inference other than that
the injury was due to the acts of the defendant sought to
be charged, is applied to prevent the inference being raised
in cases involving instrumentalities other than vehicles. The
doubt arising in cases involving a collision between two
vehicles and the plaintiff a passenger in one, has been dis-
sipated in those cases at least wherein the facts are that the
plaintiff was a passenger for hire in the defendant’s train,
street-car, bus or taxicab. (St. Clair v. McAlister, 216 Cal.
95 [13 Pac. (2d) 924]; Housel v. Pacific Elec, Ry. Co., 167
Cal. 245 [139 Pac. 78, Ann. Cas. 1915C, 665, 51 L. R. A.
(N. 8.) 1105]; Osgood v. Los Angeles Traction Co., 187
Cal. 280 [70 Pac. 169, 92 Am. St. Rep. 171]; Holt v. Yellow
Cab Co., 124 Cal. App. 385 [12 Pae. (2d) 472]; Sloan v.
Original Stage Line Inc., 124 Cal. App. 317 [12 Pac. (2d)
465]; Kilgore v. Brown, 90 Cal. App. 555 [266 Pac. 297];
Burke v. Dillingham, 84 Cal. App. 736 [258 Pac. 627];
Atkinson v. United Railroads of San Francisco, 71 Cal. App.
82 [234 Pac. 863].) In that class of cases the doctrine has
been limited in its application to the defendant who was

carrying the plaintiff as a passenger. .(Tompkins v. Clay
St. R. R. Co., 66 Cal. 163 [4 Pac. 1165]; Harrison v. Sutter
St. Ry. Co., 184 Cal. 549 [66 Pac. 787, 55 L. R. A. 608].)

No doubt is entertained that the doctrine is applicable
when the plaintiff has been injured in an accident involving
only the car being driven by the defendant who is not a
common carrier, as well as where the defendant is a common
earrier. (Cookson v. Fitch, 116 Cal. App. 544 [8 Pac. (2d)
27]; Queirolo v. Pacific Gas & Blec. Co., 114 Cal. App. 610
[800 Pac. 487] ; Ireland v. Marsden, 108 Cal. App. 682 [291
Pac. 912]; Crooks v. White, 107 Cal. App. 304 [290 Pac.
497]; Brown v. Davis, 84 Cal. App. 180 [257 Pac. 877].)

The statement of the doctrine held applicable is taken
from section 59 of Shearman and Redfield on Negligence,
sixth edition, and is the statement given to the jury in the
present case, viz.: ‘When a thing which causes the injury
is shown to be under the management of the defendant, and
the accident is such as in the ordinary course of things does
not happen, if those who have the management use proper
care, it affords reasonable evidence, in the absence of ex-
planation by the defendant, that the accident arose from
a want of care.”’ (Housel v. Pacific Elec. Ry. Co., supra,
p. 247.)

The appellant contends that where a collision between
two vehicles is involved and the plaintiff is a passenger in
one, the application of the doctrine should be restricted to
those cases wherein the defendant sought to be charged was
a common carrier.

In a few of the cases wherein the defendant sought to be
charged was a common carrier and the plaintiff its pas-
senger, there is language which appears to place the reason
or basis for the application of the doctrine on the higher
degree of care required to be exercised in the transportation
of the passenger for hire. (McCurrie v. Southern Pac. Co.,
122 Cal. 558, 561 [55 Pac. 824]; Housel v. Pacific Elec. Ry.
Co., 167 Cal. 245, 249 [139 Pac. 78, Ann. Cas. 19150, 665,
51 L. BR. A. (N. 8.) 1105]; St. Clair v. McAlister, 216 Cal.
95 [18 Pac. (2d) 924].)

The inference of negligence which is stated to arise when
the plaintiff has been injured by the vehicle under the con-
trol of the defendant as a common carrier, and which places
upon the defendant the burden of going forward with evi-

| es 65

dence that the injury was not caused by its negligence
(Bush v. Barnet, 96 Cal. 202 [81 Pac. 2]; McCurrie v.
Southern Pac. Co., supra; Osgood v. Los Angeles Traction
Co., supra), is the same in all practical respects as in
eases where the doctrine of res ipsa loquitur has been ap-
plied. In some of the cases the conclusion that the infer-
ence is established is based on both grounds. (Scarborough
Vv. Urgo, 191 Cal. 341 [216 Pac. 584]; St. Clair v. Me-
Alister, swpra.) In others the inference is considered estab-
lished by the application of the principles underlying the
doctrine of res ipsa loguitwr, both in cases where no colli-
sion occurred as well as where another vehicle was involved.
(Holt v. Yellow Cab Co., 124 Cal. App. 385 [12 Pae. (2d)
472]; Sloan v. Original Stage Line, Inc., 124 Cal. App. 317
[12 Pac, (2d) 465]; Burke v. Dillingham, 84 Cal. App.
736 [258 Pac. 627]; Seney v. Pickwick Stages, 82 Cal. App.
226 [255 Pac. 279]; Harvey v. Dillingham, 81 Cal. App.
443 [253 Pac. 970]; Atkinson v. United Railroads of San
Francisco, 71 Cal. App. 82 [234 Pac. 863]; Leitert v. Pick-
wick Stages, 68 Cal. App. 504 [229 Pac. 889].) The work-
ability of the rule that the inference of negligence arises is
the same under either theory, and is summed up in Osgood
vy. Los Angeles Traction Co., 187 Cal. 280, at page 283 [70
Pac. 169, 92 Am. St. Rep. 171], in the following language:
“Tt the fault or negligence which was the proximate cause
of the injury was attributable to some other vehicle under
other and independent control, the defendant could so show,
and that would be a good defense, but the presumption of
defendant’s negligence arises regardless of the fact that
the injury may have been caused by some other agency.
The instruction did not shift the burden of proof of the
whole case to defendant. It was nothing more than saying
that, upon the particular issue, plaintiff has established
negligence on defendant’s part, and defendant must meet
this proof by ‘showing that the injury was without any negli-
gence on its part.’ ’’

“ “We come then to the case of Smith v. O’Donnell, 215 Cal.
714 [12 Pac. (2d) 933], in which the plaintiff, being carried
as a guest passenger in the defendant’s airplane, received
injuries as a result of a collision between it and a plane
flown by Ebrite. While in that case it was held that the
defendant was a common carrier and owed the same duty of

66 a —

care to the plaintiff as to a passenger for hire, and it was
noted that the doctrine of res ipsa loqwitwr was most’ fre-
quently applied against common carriers, nevertheless the
underlying principles of the doctrine were held applicable
by virtue of the facts of the accident itself. The court
said: ‘The question really is whether the doctrine was
applicable under the facts proved. It should be remembered

that the injury was occasioned by a collision in the air with |

the plane of Ebrite. The foundation or reason for the doc-
trine is based upon probabilities and convenience. When it
is shown that the occurrence is such as does not ordinarily
happen without negligence on the part of those in charge
of the instrumentality, and that the thing which occasioned
the injury was in charge of the party sought to be charged,
the law, operating upon the probabilities and the theory that
if there was no negligence the defendant can the most con-
veniently prove it, raises a presumption of negligence which
the defendant must overcome by proof that there was in
fact no negligence. (O’Connor v. Mennie, 169 Cal. 217 [146
Pac, 674, 676]; Judson v. Giant Powder Co., 107 Cal. 549
[48 Am. St. Rep. 146, 29 L. RB. A. 718, 40 Pac. 1020];
Kahn v. Triest-Rosenberg Cap. Co., 139 Cal. 340 [73 Pac.
164].) In other words, as is said in the first cited case:
* ... To justify its application in any case, the circum-
stances of the accident must be such as, unexplained, afford
reasonable evidence of want of care in a respect for which
the defendant is liable in the particular action.... 7”? It
was also said: ‘‘If the proper degree of care is used a col-
lision in midair does not ordinarily occur, and for that
reason the doctrine was properly submitted to the jury.’’
It is to be noted that in that case the plane of Ebrite
erashed upward through the right wing of the defendant’s
plane. (brite v. Crawford, 215 Cal. 724, 727 [12 Pac. (2d)
987].) Nevertheless it was held that the plaintiff Smith
was entitled to rely upon the doctrine inasmuch as such
a collision in midair does not ordinarily oceur if the de-
fendant has exercised the degree of care required of him,
HH It is manifest from the decided cases that no dis-
tinction can properly be made, and the application of the
doctrine of res ipsa loquitur be refused, as against a defend-
ant who had control of the vehicle in which the plaintiff was
a passenger, merely on the ground that the defendant was

7 Dn 67

not a common carrier. When the relationship between the
parties and the defendant’s duty have been shown, a plain-
tiff, free from negligence, has established a prima facie case
when proof is made that he has sustained injury in a col-
lision between the vehicle driven by the defendant and an-
other vehicle. And this is so, whether the defendant be a
common carrier or a private carrier, and the plaintiff a
passenger for hire or a guest. As in a case where no other
vehicle is involved, i. e., where the vehicle in which the
plaintiff was riding overturns or is run into an obstruction,
the inference raised may be overcome by the defendant’s
showing that the collision was not due to his negligence.
And in a case such as the present this showing may be
established by proof that the injury was caused solely by the
negligence of the driver of the other vehicle. If the doctrine
of res ipsa loquitur is applicable at all in the present case,
it is obvious that it applies as stated and not as limited by
the trial court in the first part of the instruction com-
plained of, viz., to the overturning of the car. Also, if the
doctrine applies, the limitation stated in the instruction can-
not be a subject of complaint by the appellant.

|| The facts in the present case justify the implied
finding of the jury that the appellant perceived Cole during
the time both were entering the intersection, and in the
exercise of ordinary care under the circumstances should
have been able to avoid the impact with Cole’s car. It is
no answer in this case to say that Cole, because he was ex-
ceeding the speed requirements at that intersection, did not
have the right of way. On the record the jury could prop-
erly find that Brown must have seen that Cole in any event
intended to take the right of way, and in the exercise of
ordinary care in so far as the plaintiff was concerned,
should have yielded that right to Cole,

Keller v. Cushman, 104 Cal. App. 186 [285 Pac. 399,
400], relied on by the appellant, involved an appeal by the
plaintiff from a judgment entered on an order granting the
defendant’s motion for a nonsuit. The plaintiff’s decedent
was killed when at an intersection of two highways an-
.other automobile struck the automobile in which he was rid-
ing as a guest. The plaintiff sued the driver of the auto-
mobile in which the decedent was riding. As to the facts
the reviewing court stated: ‘‘ All that is shown is the fact of

68 Le 7

a collision in which a car driven by a person other than the
defendant, collided with the car driven by the defendant,”
and that the facts otherwise showed that the defendant was
free of negligence. The court held that the plaintiff was not
entitled to the application of the doctrine of res ipsa logui-
tur. In arriving at that conclusion the court followed the
eases of Scellars v. Universal Service, supra, and Diamond
v. Weyerhaeuser, supra. In the former case the principle
relied upon by the court in the case of Keller v. Cushman,
supra, was employed to deny the application of the doctrine
of res ipsa loguitur to facts involving injury to the plain-
tiff’s automobile supposedly while it was in the charge and
control of the defendant garage. In Diamond v. Weyer-
haeuser, supra, the plaintiff was on a milk wagon which
collided with the defendant’s automobile. On appeal by
the plaintiff from a judgment entered on a directed verdict,
it was held that negligence in such a case was not to be
inferred from the mere fact of injury. In the case of
Keller v. Cushman, supra, the court did not distinguish the
ease before it as involving the defendant as the driver of
the car in which the plaintiff was riding as a passenger at
the time of the collision.

The cases of Scellars v. Universal Service and Diamond v.
Weyerhaeuser, supra, also relied upon by the appellant, are
therefore disposed of as being not in point on the facts.

In Harrison v. Sutter Street Ry. Co., 184 Cal. 549 [66
Pace. 787, 55 L. R. A. 608], wherein the plaintiff was injured
while a passenger on a street-car when it collided with a
brewery wagon, the court, following Tompkins v. Clay St.
R. BR. Co., 66 Cal. 163 [4 Pac. 1165], held that an instruc-
tion seeking to apply the doctrine of res ipsa loquitur against
the operators of both vehicles who were made defendants was
properly refused.

In Edwards v. Gullick, 218 Cal. 86, 88 [1 Pac. (2d) 11],
the plaintiff was injured while riding as a guest in an
automobile driven by the defendant Gullick, which collided
with another automobile. It was not concluded that an
instruction which applied the doctrine of res ipsa loquitur
as against Gullick was erroneous on the ground urged in-
that case and stated in Keller v. Cushman, supra; but it was
held that if the instruction was error in that respect it was

a es 69
harmless, inasmuch as the negligence of the defendant Gul-
lick was established by the facts in evidence.

There is no contention in the present case that the court
did not properly instruct the jury that the burden rested
upon the plaintiff at all times to prove her case by a pre-
ponderance of the evidence; nor is there any claim that the
damages awarded were excessive.

We conclude that the giving of the instruction complained
of was not error and that the record supports the jury’s
implied finding that the defendant did not overcome the in-
ference that the accident was due to negligence on his part.

Judgment affirmed.

THOMPSON, J., Dissenting. —I dissent. In my judg-
ment, the majority opinion unduly extends the applica-
tion of the doctrine of res ipsa loquwitur. In the earlier
eases it was thought that the doctrine was never appli-
cable in those cases where two instrumentalities under
separate control were involved in the accident. (Harri-
son v. Sutter St. Ry. Co., 184 Cal. 549 [66 Pac. 787, 55
L. R. A. 608], and Diamond v. Weyerhaeuser, 178 Cal.
540 [174 Pac. 38].) Lately, it has been held proper
to extend application of the rule to one of two involved
instrumentalities where, at the time of the accident, it
was a common carrier vehicle and where the plaintiff was
seeking to establish the concurring negligence of those in
control of both. (Burke v. Dillingham, 84 Cal. App. 736
[258 Pac.. 627], and St. Clair v. McAlister, 216 Cal. 95
[13 Pae. (2d) 924].) The reason for extending the appli-
cation of the doctrine to the last-mentioned cases lies in
the fact that common carriers must exercise ‘‘the utmost
care and diligence’? for the safety of their passengers.
(See. 2100, Civ. Code; Housel v. Pacific Elec. Ry., 167 Cal.
245 [139 Pac. 73, Ann. Cas. 1915C, 665, 51 L. R. A. (N. 8.)
1105] ; Smith v. O’Donmell, 215 Cal. 714, 728 [12 Pac. (2d)
933].) In the last-cited case, after referring to the lan-
guage of the first to the effect that by reason of the very
high degree of care required of common carriers such acci-
dents do not ordinarily occur, it is said: ‘‘The language is
peculiarly apt in the instant case. If the proper degree of
care is used a collision in midair does not ordinarily occur,
and for that reason the doctrine was properly submitted to

10 ee —

the jury.’’ However, the same may not be said of one
driving an automobile who is under the necessity of exercis-
ing only that degree of care which the ordinarily reasonable
man would exercise. Common knowledge dictates to us
that automobiles collide with great frequency, where one
of the drivers thereof is using ordinary care. Hence the dis-
tinction between the two is well illustrated by the familiar
statement that ‘‘... [T]he doctrine is applicable only
where the physical cause of the injury and the attendant
circumstances indicate such an unusual occurrence that in
their very nature they carry a strong inherent probability of
negligence and in the light of ordinary experience would
presumably not have happened if those who had the man-
agement or control exercised proper care.’ (45 ©. J.
1211.)

. The distinction is well pointed out in Griffen v. Manice,
166 N. Y. 188 [59 N. E. 925, 82 Am. St. Rep. 630, 52
L. R. A. 922], in these words: ‘‘Of course the relation of
the parties may determine the fact to be proved, whether it
be the want of the highest care or only want of ordinary
eare; and, doubtless, circumstantial evidence like direct evi-
dence may be insufficient as a matter of law to establish the
want of ordinary care, though sufficient to prove absence of
the highest degree of diligence.’’ And, in Hast End Oil
Co. v. Pennsylvania Torpedo Co., 190 Pa. 350-352 [42 Atl
707, 708], the same fundamental difference is noted as fol-
lows: ‘‘The maxim res ipsa loquitur is itself the expression
of an exception to the general rule that negligence is not
to be inferred, but to be affirmatively proved. The ordinary
application of the maxim is limited to cases of an absolute
duty, or an obligation practically amounting to that of an
insurer.’” .

There is a still further reason for the application of the
doctrine to common carriers generally which does apply
here, and it is this, that the doctrine is based in part upon
what is sometimes called the rule of convenience and some-
times called the rule of necessity, i. e., “‘as the management
and control of the agency which produced the injury is,
under the circumstances to which the doctrine applies, ex-
elusively vested in defendant, plaintiff is not in a position to
show the particular circumstances which caused the offend-
ing instrumentality to operate to his injury, while defend-

EE =i val

ant, being more favorably situated, possesses the superior
knowledge or means of information as to the cause of the
accident, and should, therefore, be required to produce the
evidence in explanation’’, (45 Cal. Jur. 1205.)

In the instant cause, it cannot be said that defendant’s
knowledge of the cause of the accident was superior to that
of plaintiff, nor is any reason assigned why the latter should
not prove the negligence of the former, if he was, in fact,
guilty.

Furthermore, in order to arrive at the result reached in
the prepared opinion, the cases of Keller v. Cushman, 104
Cal. App. 186 {285 Pac. 399], and Griisch v. Pickwick Stages
System, 181 Cal. App. 774 [22 Pac. (2d) 554], must be
overruled. In my opinion, they cannot in principle be dis-
tinguished and, for the reasons already stated, we should
adhere to the rule announced therein.

Langdon, J., concurred.
Rehearing denied.
Langdon, J., and Thompson, J., dissented.

[S. F. No. 14984, In Bank.—February 5, 1984.]

PEARL HILMER, Petitioner, v. THE SUPERIOR COURT
OF THE CITY AND COUNTY OF SAN FRANCISCO
et al., Respondents.

Ernest I. Speigl and Robert B. Gaylord for Petitioner.

Gavin McNab, Schmulowitz, Wyman, Aikins & Brune,
Nat Schmulowitz and George G. Harris for Respondents,

WASTE, C. J—It appears that petitioner procured a
final decree of divorce from her husband, Marshall Filmer,
on August 10, 1932. The custody of the minor child of
the parties was awarded to her, and the father of the child
was directed to pay $50 a month for the child’s support.
Contempt proceedings have been necessary from time to time
to compel payment of this award. In March, 1933, peti-
tioner moved the respondent court for an increase of the
support allowance and for an order compelling the defend-
ant husband to furnish security for its prompt and con-
tinued payment. This motion was based on sections 139 and
140 of the Civil Code. In support thereof petitioner filed
an affidavit wherein it is averred that the defendant hus-
band repeatedly has been delinquent in making the monthly
support payments; that recently and by reason of his
father’s demise he had come into an inheritance, not yet
distributed, of approximately $12,000; that he is intem-
perate and incapable of handling money judiciously, and is
neither a fit nor proper person to be entrusted with the
monthly allowance of the minor child.

After hearing, the motion was denied, whereupon peti-
tioner instituted this proceeding in mandamus to compel the
respondent court to make an order requiring and directing
that security be furnished for the future and continued pay-
ment of the monthly installments of support money. There

Si 3

have been filed herein many briefs, affidavits and counter-
affidavits raising many sharply controverted issues of fact
which, because of the conclusion we have reached, we find
it unnecessary to consider or determine.

HJ The provisions of section 140, supra, relating to
security for alimony or support awards are permissive and
not mandatory and it is within the discretion of the trial
court to require or not to require such security. (Latterner
y. Latterner, 121 Cal. App. 298, 302 [8 Pac. (2d) 870].)
Ht is well settled that mandamus will not lie to control
the discretion of a court or judicial officer or to compel its
exercise in a particular manner, except in those rare in-
stances when under the facts it can be legally exercised in
but one way. (Kerr v. Superior Court, 180 Cal. 183, 185
[62 Pae. 479]; Matter of Ford, 160 Cal. 334, 346 [116 Pac.
757, Ann. Cas. 1912D, 1267, 35 L. BR. A. (N. S.) 882];
Greene v. Superior Court, 188 Cal. App. 35, 88 [23 Pac.
(2d) 785]; People v. Judson, 128 Cal. App. 768, 774 [18
Pae. (2d) 379]; Svoboda v. Purkitt, 75 Cal. App. 148, 150
[242 Pac, 81].) Stated differently, a court can be com-
pelled to act, but having acted, its act cannot be reviewed
on mandamus.

Hl The principal point of dispute herein is whether the
respondent court in the exercise of its jurisdiction has acted
upon and denied petitioner’s motion for security or whether
it has refused to exercise its jurisdiction in the premises.
If the former be the fact, then, under the rule above stated,
mandamus will not lie, for a court may act as efficiently by
denying as by granting a motion or request. On the other
hand, should it be determined that the respondent court has
refused to act, mandamus will, and should, issue to put it in
motion, but not, of course, to compel it to act in a particular ©
manner, inasmuch as the situation here presented is not one,
within the exception, in which the court can exercise its dis-
eretion in but one way.

‘We are satisfied after a reading of the entire record now
before us that the respondent court in the exercise of its
jurisdiction denied petitioner’s motion for security, without
prejudice to its renewal, because said court had determined
that in its opinion the application was inopportune in view
of the fact that all monthly support payments then due had
been paid, though perhaps under compulsion, and the time

14 es =
had not then arrived for distribution of the estate under
which the defendant husband claimed the inheritance above
referred to.

That the respondent court did not refuse to entertain the
motion for security, but rather denied it as having been, in
effect, prematurely presented, is apparent from both the
minute order and the subsequent formal order made upon
the denial of the motion. The minute order declares that
“good cause appearing therefor’? the motion is “denied
without prejudice’. The formal order of denial thereafter
framed and presented to the respondent court by counsel
for the petitioner states, in part, that it ‘appearing to the
court by stipulation of both parties that all sums of money
heretofore ordered herein to have been paid by defendant
to plaintiff were on said day paid, and the court being
advised in the premises’? the motion is denied ‘‘without
prejudice, upon the ground that no money being now due
from defendant to plaintiff, the court is without jurisdiction
to entertain said motion’’,

Petitioner seizes upon the italicized portion of said order
to support her theory that the respondent court has re-
fused to entertain the motion, thus giving rise to a sit-
uation warranting the issuance of a writ of mandamus. We
are not so impressed. In our opinion the order may rea-
sonably be construed to mean that the motion was denied
without prejudice to its renewal because the respondent
court was of the opinion that the time was not opportune
for its granting. Such a construction comports with the
record as a whole and is in accord with the respondent
court’s denial herein that it had refused to entertain juris-
diction of the motion. The words, “‘without jurisdiction’’,
employed in the order can, and should, be so construed as
to comport with the truth.

Examination of the record discloses that the respondent
court has the welfare of the child in mind. This is evi-
denced by the fact, as appears from an excerpt of certain
proceedings, incorporated herein, had upon an application
for partial distribution of the estate in which the defendant
husband has an interest, in which the respondent court, of
its own volition and in the absence of petitioner’s counsel,
inquired as to what provision, if any, was being made for the
support of the minor child. This, and other matters dis-

a es 75

closed by the record and briefs herein, satisfy us that while
the respondent court has presently denied the motion for
security without prejudice to its renewal, it will, and prop-
erly should, be in a receptive mood when timely applica-
tion is again made.

For the above reasons, the alternative writ and order to
show cause heretofore issued are, and each is, hereby dis-
charged and the petition denied.

Shenk, J., Thompson, J., Curtis, J., Langdon, J., Pres-
ton, J., and Seawell, J., concurred.

[L. A. No, 14500. In Bank—February 8, 1934.]

GWENDOLYN ASHLEY, Respondent, v. FRANK RIVERA
et al., Defendants; A. J. PINNEY, Appellant.

Paul Nourse, Irving E. Read and Forrest A. Betts for
Appellant. .

Stuart McHaffie and Charles Rubin for Respondent.

PRESTON, J.—<Action to recover damages for personal
injuries received by plaintiff on June 11, 1929, about 11:40
P. M., as the result of a collision between the automobile
in which she was riding as guest of defendant Pinney, and
a city sprinkling truck driven by defendant Rivera. De-
fendant Rivera was driving the truck easterly on Seventh
Street, Los Angeles. Defendant Pinney was driving west-
erly on said street, intending to make a left turn, southerly,
into Lake Street. Before the turn was completed, the colli-
sion occurred. Plaintiff instituted this action against both
of the above-mentioned parties. The evidence adduced, par-
ticularly that bearing upon issues of negligence, was highly
conflicting in character. The jury found for defendant
Rivera, but rendered a verdict against defendant Pinney,
and in favor of plaintiff, in the sum of $5,000. Defendant
Pinney thereupon appealed.

Appellant does not argue the insufficiency of the evidence
to support the verdict and judgment, but reviews the evi-
dence for the purpose of showing that the conflict therein
is so great as to render prejudicial certain alleged errors,
irrespective of whether they would otherwise be considered
of sufficient strength to justify a reversal of the judgment.

HH Appellant contends that the court erred in admitting
evidence to show the poverty of plaintiff and that the error
was enhanced by counsel in arguing plaintiff’s poverty to
the jury. We have reviewed the entire record and find that
this claim merits scant discussion. During the course of a
rather lengthy inquiry into plaintiff’s earning ability, which
prior to the accident was substantial, she testified that she
had been a widow for ten years and had supported both
herself and her two children. Counsel, addressing the jury,

Ee m1

referred to her as ‘‘poor’’ and ‘‘not wealthy’’. It is patent
that if this testimony and these remarks were out of order,
the error was slight and could casily have been cured, had
it been so requested, by proper instruction to the jury.
At any rate, it is clear that appellant suffered no prejudice
which would warrant a reversal of the judgment.

HE We are thus brought to the sole issue of substance
on this appeal. It is appellant’s claim that the court erred
in admitting testimony, over his persistent objections, to
prove an alleged offer of compromise and settlement in his
behalf, showing the interest of his insurer in this cause and
that, particularly under said direct conflict in the evidence,
it constituted reversible error. The testimony complained
of relates to defendant’s exhibit 2, which purports to be a
statement by plaintiff of the manner in which the collision
occurred, concluding with the sentence: ‘‘I consider that
the driver of the other car was solely to blame and that Mr.
Pinney was not to blame in any way.’’? Underneath this
closing sentence, and in a different handwriting, are the
words: “‘I read this and consider correct as near I can.’’
This statement was brought into the case by counsel for
appellant, during his cross-examination of plaintiff, in the
following manner:

“Q. Mrs. Ashley, will you write on that piece of paper
these words: ‘I read this and consider correct as near as I
can.’ A. ‘I read this and consider correct as near as I can.’
Q.... That is sufficient. ... Mr. Tilson: I would like to
have a look at that too. Mr. Read: All right. I will ask

, You if this is your handwriting at the bottom of this piece
of paper. Just look at the handwriting. A. Yes. Q. The
answer is ‘Yes.’ Now, I will offer in evidence this statement
on behalf of the defendant Pinney. Mr. McHaffie: We
would like to have an opportunity before it is put in’ evi-
dence to know when and where the statement was made and
the circumstances, and why it wasn’t signed. It is un-
signed... . We want to know the reason why this state-
ment is now presented and who presented the statement to
the witness, and what their interest was in the matter under
consideration, and its connection with this particular law
suit. The Court: If it is not explained at this time, I will
permit you to ask the questions. ...I think I will admit
it subject to any explanation the witness may make,’”? The

78 Le |

statement was thereupon introduced in evidence and read
to the jury.

When plaintiff was called for redirect examination, coun-
sel for appellant asked the court to instruct plaintiff’s coun-
sel that they must not permit any evidence to be brought
before the jury having reference to the question of insurance
involved in the case, or else it would be assigned as preju-
dicial error. Plaintiff took the stand and was again shown
the statement. She testified that she did not write it, but
first saw it at her home, where it was brought by a man
who stated he was the insurance broker or adjuster from
the Automobile Club of Southern California. She then
gave a detailed account of her conversation with this man.
She testified that the statement had been prepared prior to
his visit, that he induced her to write the above-quoted
words at the close thereof and also tried to get her to sign
it, that she refused to sign without having time to think the
matter over; that he offered to settle with her for $600 or
$800, stating that she could still make claim against the
truck driver; that he returned the next day, but she did
not answer the door and never saw him again.

After plaintiff rested her case, said insurance adjuster
was called as a witness by defendants and gave his version
of the visit with plaintiff. He testified that the statement
was prepared in her apartment after she told him how the
accident happened and, at his request, she wrote that it was
correct; that he did not care whether she signed it; that
he explained to her that Mr. Pinney’s car was being re-
paired by the Automobile Club, which intended to seek re-
imbursement from the truck driver and stated that he would
be glad to help her collect from the truck driver who, she
said, was responsible for the accident. On cross-examina-
tionhe testified that he did not make plaintiff any offer of
settlement if she would sign the statement, as he had no
authority to pay money anyway; that he was merely investi-
gating the case.

Section 1854 of the Code of Civil Procedure provides:
‘“When part of an act, declaration, conversation, or writing
is given in evidence by one party, the whole on the same
subject may be inquired into by the other; when a letter is
read, the answer may be given; and when a detached act,
declaration, conversation, or writing is given in evidence,

a es 79

any other act, declaration, conversation, or writing, which
is necessary to make it understood, may also be given in
evidence.’’ Section 2084 of said code permits cross-examina-
tion of a witness ‘‘as to any facts stated in his direct ex-
amination or connected therewith’’.

‘We fail to see how appellant can escape application of
these sections to justify admission of the evidence in ques-
tion by the trial court. When appellant introduced the
statement, he opened the door to inquiry surrounding the
facts and circumstances of its preparation and presentation
to plaintiff. How this information could have been adduced
without revealing the existence of insurance and the sub-
stance of the interview between plaintiff and said adjuster,
is hard to see. Appellant is now in no position to complain
that prejudice has resulted from his own act in introducing
said statement into the record. It is also immaterial that
the alleged objectionable matter was again mentioned upon
eross-examination of the adjuster. It was already in the
record and nothing of prejudice to appellant was added.
Moreover, in view of the broad field opened up by the
direct examination of the adjuster, we cannot say that said
cross-examination exceeded its proper scope. We conclude
that all the evidence of which appellant complains was per-
tinent to the explanation of said exhibit 2 and was invited
by the introduction of said exhibit in evidence.

The question of reversible error growing out of the admis-
sion of evidence of this character must always be resolved
upon the peculiar facts of the individual case; hence, we
shall not cite the numerous authorities on the subject. The
case of Zarafonitis v. Yellow Cab Co., 127 Cal. App. 607
{16 Pace, (2d) 141], states a ruling similar to the above.
The cases of Citti v. Bava, 204 Cal. 136 [266 Pac. 954], and
Squires v. Riffe, 211 Cal. 870 [295 Pac. 517], are not in
point as in both of them the inquiry which led to introduc-
tion of the objectionable evidence was opened by the plain-
tiff.

The judgment is affirmed.

Langdon, J., Curtis, J., Thompson, J., Shenk, J., Sea-
well, J., and Waste, C. J., concurred.

[Sac. No. 4779. In Bank—February 8, 1934]

R. LEWIS, Respondent, v. SHELL OIL COMPANY (a
Corporation), Appellant.

, [| 81

|
F, F. Thomas, Jr., William E. Wright and McCutchen,
Olney, Mannon & Greene for Appellant.

Bareroft & Barcroft and John J. Coghlan for Respondent.

THOMPSON, J.—This litigation revolves around a con-
tract, between the parties, in the following words:

“This agreement, made and entered into this 22nd day of
March, 1927, by and between R. Lewis of the City of Ma-
dera, County of Madera, State of California, and Shell
Company of California, a California Corporation.

“‘That for the term, at the rental and upon the conditions,
covenants and agreements hereinafter expressed and subject
thereto and in consideration of One ($1.00) Dollar to said
R. Lewis in hand paid, receipt of which is hereby acknowl-
edged, said R. Lewis hereby agrees that the Shell Company
of California shall lease the exclusive advertising privileges
on the signs on top of building, and certain panels on south
side of said building of said R. Lewis for a period of five
(5) years from completion of said work or during the life
of this agreement.

“In consideration of the Shell Company of California
leasing the exclusive advertising privileges for which they
agree to pay a sum of Fifty ($50) Dollars per month for a
period of five years from March 22nd, 1927, to March 22,
1982, said R. Lewis hereby agrees to purchase petroleum
products from the Shell Company of California for sale
and dispensing through the following units of equipment:
One Wayne visible Curb pump, Cut 711, Serial 72349; One
Bowser buggy, serial C. 17554; 2 Imb-oil containers. In
event of said R. Lewis’ removal from his present location,
or sale of lease under which he holds premises, he shall have
the right to carry on under this agreement at his new place
of business, under the same terms and conditions herein

a

provided, over a period of even and consecutive dates dur-
ing which time the advertising privileges are hereby leased.

“It is further agreed that the Shell Company of Cali-
fornia are to secure not less than the sum of 100 per cent
of the total volume of gasoline business sold and not less
than 75 per cent of the total volume of lubricating oil by
said R. Lewis during the life of this agreement. Differ-
ential, on gasoline, not less than three (3) cents per gallon,
during the life of this agreement.’’

On July 31, 1930, the defendant company refused to sell
Lewis any further supply of gasoline. This action was com-
menced to recover damages for the company’s refusal in
this regard. The defense, by way of demurrer, and subse-
quently by answer, amounts to the same contentions as are
now advanced on this appeal by it from the judgment en-
tered on a verdict of the jury in plaintiff’s favor, together
with an appeal from an order denying defendant’s motion
for a judgment non obstante veredicto.

It is asserted by appellant that the agreement is void for
uncertainty because there is no basic price established by
the agreement from which to determine, by means of the
differential, the selling price of gasoline to the respondent
and because no price whatever was agreed upon for lubri-
eating oils. It is also urged that for the entire period of the
contract up to and including the day on which the defend-
ant refused to sell gasoline to the respondent, the latter had
violated and breached the agreement by failure to purchase
seventy-five per cent of his total value of lubricating oil,
but had secured more than sixty per cent of his requirements
from the Pennzoil Oil Company. In truth, the record dis-
closes that he purchased the following percentages per an-
num from appellant: In 1927, thirty-nine per cent; in 1928,
thirty-nine per cent; in 1929, thirty-six per cent, and in
1930, forty per cent.

We are not inclined in this case to follow counsel
through the long arguments and authorities concerning the
certainty or uncertainty of the contract, because this uncon-
tradicted fact remains that respondent had consistently pur-
chased more than sixty per cent of his lubricating oil from
another company. His contention is that after the appel-
lant refused to deliver gasoline he ordered enough oil to
make up the shortage and that he had the whole term of

a | 83

the contract within which to purchase seventy-five per cent
of his requirements. With this contention we cannot agree.
Assuming, solely for the purpose of argument, that the con-
tract was valid and certain it is evident that it was the
plain intent of the parties that he should purchase from
the defendant company sevent'y-five per cent of the oil sold
by him in the ordinary course of his business. To test his
compliance with this provision a reasonable length of time
and a reasonable run of business would be the standard.
But to say that for four years and four months he can
make no pretense of complying with the covenant by him
to be performed and yet exact damages from the other party
for failure to discharge its obligation, is reducing the situa-
tion to an absurdity. The rule of law is so elementary and
fundamental and so in keeping with good conscience and
common justice, that we need do no more than refer to Los
Angeles Gas & Elec, Corp. v. Amalgamated Oil Co., 168 Cal.
140 [142 Pac. 46], and Sterling v. Gregory, 149 Cal. 117
[85 Pac. 305].

This contention is founded upon the proposition that
the contract under consideration is entire—which cannot
successfully be denied. Whether a contract is severable or
entire is a question of interpretation, depending upon the
intent of the parties. (Los Angeles Gas & Elec. Co. v.
Amalgamated Oil Co., 156 Cal. 776 [106 Pac. 55].) The
contract in the present case can be properly likened to an
agency contract for the sale of appellant’s products, both
gasoline and lubricating oils. The parties by their writing
specified the maximum permissible departure from exclusive
representation of appellant by respondent, thereby manifest-
ing their intent that the contract should not be severable,
put entire. In other words, the nature of the subject matter
was such and the language of the parties such as to indicate
that the purchase by respondent from appellant of one hun-
dred per cent of his gasoline and seventy-five per cent of
his lubricating oil requirements was essential to the contract.
HJ The entirety of the agreement also disposes of respond-
ent’s contention that he was entitled to recover by a supple-
mental complaint filed by him the rental of the advertising
space. Not only is it apparent from a reading of the agree-
ment that the roof and panels were leased in consideration
of the agreement of respondent to purchase Shell gasoline

84 es —

exclusively and seventy-five per cent of Shell lubricating oil,
but also it is in evidence that the rental was based upon an
estimate of respondent’s annual sale of gasoline, calevlated
upon previous years at the rate of one cent per gallon.
The contract being nonseverable, respondent was not en-
titled to recover after his own persistent failure to comply.

As heretofore indicated, the defendant, after the return
of the jury’s verdict, but before the entry of the judgment,
made a motion for a judgment non obstante veredicto, which
was denied and from which order it has also appealed. We
are asked to reverse this order and, by so doing, in effect,
direct the trial court to enter judgment against the plaintiff
and for defendant. [J In view of the plain language of
section 963 of the Code of Civil Procedure, the conclusion
is inescapable that the order is appealable. Subdivision 2
of that section specifies an ‘‘order denying a motion for
judgment notwithstanding the verdict in an action or pro-
ceeding tried by a jury where such trial by jury is a matter
of right’. Concededly the parties here were entitled to
a trial by jury as a matter of right—hence the appeal lies.
We are not called upon, in this instance, to say whether in
all eases where the evidence is insufficient to support the
verdict and such a motion has been denied, we are under the
obligation to direct a verdict in favor of the moving party.
That there is grave doubt upon that general question is
suggested by the language of section 629 of the Code of
Civil Procedure, which indicates that the order may rest
in the judicial discretion of the appellate tribunal. We do
not decide this question because our previous discussion very
clearly demonstrates that the order should have been granted
and that a different result on retrial can hardly be imagined.
For which reasons, the order should be reversed with instruc-
tions.

Other points are raised by the appellant which we deem
it unnecessary to discuss. .

The judgment and order are reversed and the trial court
instructed to enter a judgment for defendant.

Shenk, J., Seawell, J., Curtis, J., Preston, J., and Waste,
C. J., concurred.

a ees 86

[L. A. No, 12910. In Bank.—February 9, 1934.]

LOU CRAIG MERRITT, Respondent, v. HULETT C.
MERRITT, Jr., Appellant.

Bertin A. Weyl for Appellant.
No appearance for Respondent.

THE COURT.—The question presented by this appeal
is whether or not the trial court should have denied a motion
to modify a previous order for alimony and support of a
minor child in a divorce case. Certain accrued allowances
for such purpose were not paid, and the court below further
found that the only income of defendant was his monthly
salary, which was less than the amount of the monthly
allowance, and that he had no other property or assets or
credit facilities except the possibility of borrowing from
relatives or others.

86 Le 7

We are of the view that the order appealed from should
be reversed, with directions to the trial court to accord
the parties an opportunity to introduce further evidence,
and to enter such order as may then be found just and
equitable.

The appeal is by the defendant husband from a special
order made after final judgment in a divorce action denying
his motion for modification of the allowance for support
of plaintiff and the minor child. Interloeutory decree of
divorce was entered December 1, 1926, and an order made
at that time for payment of $1,000 per month, pursuant
to agreement of the parties, which was subsequently in-
creased to $1100 per month by an order from which de-
fendant appealed, and which was affirmed. (See Merritt
vy. Merritt, 106 Cal. App. 234 [289 Pac. 240].)

Later, upon a showing of decreased income by the defend-
ant, the allowance was reduced to $800 for the period of
June, 1928, to January, 1929, with a special proviso in-
serted by the judge that the modification shall not relieve
the defendant from civil liability for nonperformance
of the property settlement upon which the previous order
was based. In June of 1930 the plaintiff filed an applica-
tion to have defendant adjudged guilty of contempt for
failing to comply with the court’s order for support and
maintenance, alleging substantial arrears on account thereof.
An order to show cause was duly issued and served, and in
response thereto defendant filed affidavits of himself and his
employer’s attorney showing his inability to make the
monthly payments or to obtain the money to meet the past
due and unpaid sum, and also filed notice of a motion for
modification of the order for support of plaintiff and minor
child by reducing the payment to plaintiff from $750 per
month for herself and $350 per month for the child to $300
per month for her maiiitenance and $200 for the child.
Voluminous affidavits were filed in support of and in
opposition to the respective motions and by consent of the
parties they were heard together in November, 1930, and
thereafter the court made an order finding that ‘‘defend-
ant’s only income is his salary amounting to $800 per

* month, and that he has no other property or assets belong-
ing to him or under his control from which he receives any
additional income, or which could be converted into cash,

a De 87

+.. and is not in wilful disobedience of the order of the
court.... That defendant has no eredit facilities whatso-
ever except the possibility of borrowing additional sums
from his father or others who have heretofore financially
assisted him, and that defendant has not exhausted his
efforts or ability to borrow or obtain credit from said per-
sons.’? Then followed the order purging defendant of con-
tempt, and the provision from which the appeal is taken
and upon which argument for reversal is predicated: ‘‘That
if defendant shall on or before December 17, 1930, pay to
plaintiff in full the amount of his arrearage, being the sum
of $8,750, and further amounts that shall have in the mean-
time become due under the existing orders of this court
without interest, the court will find that the defendant
is able to pay only $600 per month upon his agreement with
plaintiff embodied in the decree of divorce aforesaid, and
that such sum only and no more shall be enforceable by
decree of court; otherwise defendant’s motion for modifica-
tion of the order requiring him to pay the sum of $1100.00
per month to plaintiff for her support and the support
and maintenance of the minor child of plaintiff and defend-
ant will be denied.’’

The transcript was filed March 7th and appellant’s open-
ing brief, with acknowledgment of service by attorney for
plaintiff was filed April 4, 1931. No respondent’s brief has
been filed and no extension of time applied for or given.
The respondent was ordered to show cause at the December
Los Angeles term of court why the order appealed from
should not be reversed or other appropriate order made.
There was no appearance on behalf of the respondent and
the case was submitted for examination and appropriate
order.

HI By section 1 of rule V of this court, it is provided
that if respondent shall not file his points and authorities
the cause may be submitted for decision upon appellant’s
brief, in which case the court may, in its discretion, decide
the case upon the statement of facts contained in such brief.
The foregoing statement of facts is taken largely from the
brief. Therein it is conceded there appears to be no Cali-
fornia authority directly in point. J) We think, how-
ever, the principles which should govern herein are correctly
declared in the cited cases of Craig v. Craig, 163 Il. 176

88 ees 7

[45 N. E. 153], and Boyden v. Boyden, a Rhode Island
ease, reported in 50 R. I. 826 [147 Atl 621, 66 A. L. R.
214], and that we should follow in this state the rules
therein announced.

In the former case the court said:

“Tf the existence of accrued and unpaid alimony should
be held to absolutely prevent the court from altering, re-
ducing or altogether abrogating future instalments of ali-
mony, then it would result that in cases of pecuniary in-
ability of defendant to pay and discharge all arrearages of
alimony, the court would be powerless to grant relief as to
future and further alimony, no matter what the changed
conditions of the parties in the property, or how loudly the
facts and circumstances might call for the equitable inter-
vention of the court. The hands of a court of equity are
not thus bound.”

In the latter case it was said:

“‘Alimony ... should be ordered upon evidence that a
husband himself has means: of compliance or a capacity
to acquire them if he make reasonable effort... . Alimony

.. where the husband is without property may not be
based on the husband’s hope of gratuities or the court’s
surmise that he will receive them. It may be unfortunate
for the petitioner . .. but she is entitled to demand from
him as a matter of right only such support as he is reason-
ably able to furnish from his property or earnings.’’

Without discussing the claims of concealment and subter-
fuge on the one hand or the assertions of good faith upon
the other, it appears to us that the intervening time may
have demonstrated the facts as distinguished from the belief
of the parties and we feel the entire matter should be set
at large for the introduction of further testimony if the
parties, or either of them, so desire and the entry of such
order as to the court may then seem just and equitable.

The order appealed from is reversed and the cause re-
manded to the trial court for such further proceedings as
may be deemed appropriate.

es (}!

[Sae. No. 4734, In Bank—February 13, 1984.]

FARM LAND INVESTMENT COMPANY (a Corpora-
tion), Appellant, v. H. D. EICH, as Treasurer, ete.,
Respondent.

[Sac. No. 4785. In Bank—February 18, 1934.]

FARM LAND INVESTMENT COMPANY (a Corpora-
tion) et al., Appellants, v. H. D. EICH, as Treasurer,
ete., Respondent,

[Sac. No. 4736, In Bank—February 13, 1934.]

FARM LAND INVESTMENT COMPANY (a Corpora-
tion), Appellant, v. H. D. EICH, as Treasurer, etc.,
Respondent.

Rich, Weis & Carlin for Appellants.

Snook & Snook & Chase and Erling S. Norby for Re-
spondent.

0s

THOMPSON, J.—The actions entitled as above were com-
menced by the owners of different parcels of land in
Reclamation District No. 784 to enjoin the defendant as
Treasurer of the County of Yuba and as trustee of the
Bond Fund of the Reclamation District from selling the
property and issuing deeds by himself, as trustee, to pur-
chasers after default by the plaintiffs in the payment of
installments of assessment on the land. Altogether there
were 480 causes of action set forth in the three complaints.
The basis of each complaint was that the defendant had
estimated the sum necessary to pay that portion of the
principal falling due on January 1, 1930, and the interest
due at the same time, at too high an amount. To under-
stand the contentions it is necessary to note that, in the year
1920, an assessment was levied against the land in the
district for a total of $897,427.39. Bonds aggregating
$834,000 were sold. On January 1, 1930, $90,000 of the
principal became due and interest in the sum of $25,020.
Concededly the defendant calculated those sums correctly.
However, he then added to the total of these two amounts
fifteen per cent thereof to cover possible delinquencies, mak-
ing altogether $132,273. He then took a rate of fifteen
cents per hundred, which totaled $601.66 greater than the
sum of $132,273.

It was also claimed that on October 1, 1929 (the date
on which the estimate was computed), there was in the
bond fund of the district $4,490.24, no part of which was
taken into consideration in arriving at the sum to be raised
by the levy.

The trial court found that defendant’s estimate was ex-
cessive in the amount of $601.66, or, in other words, that
he should have taken the exact rate instead of conveniently
fixing it at fifteen cents per hundred. By the judgment
the court declared the certificates of sale which the defend-
ant, as treasurer and trustee, had made and executed in
favor of himself as trustee, to be irregular and void, but
the court estimated the correct amount due from each parcel
of land, and provided that unless the respective plaintiffs
should, within twenty days from the date of the judgment,
pay the amount thus fixed no injunction would issue. The
plaintiffs prosecute this appeal and contend that they were

es

entitled to an injunction without being required to pay
the amounts fixed by the court.

HH The effect of the judgment in each action is to
declare that the certificates of sale were ‘‘irregular and void
and of no effect’? and to adjudge that they ‘‘be set aside
and canceled’’, It was further decreed that the defendant
either as treasurer or as trustee of the Bond Fund had
no “‘right, title or interest’? in any of the parcels of land,
except that, on December 30, 1929, there was due to the
defendant as treasurer of the county the proportionate
shares of the entire outstanding assessment which was
secured by a direct, valid and subsisting lien upon the
respective parcels of real property. The fact that the court
further ordered the plaintiffs to pay their respective por-
tions of the amount found to be due as a condition precedent
to the injunction deserves little or no consideration at this
time in view of the outcome of a proceeding which is called
to our attention by both appellants and respondent, the
record of which is before us, and the substance of which we
will now narrate.

Julia Adams Balding and E. M. Price, holders of bonds
which represent a portion of the assessment here involved,
filed their petition for a writ of mandate asking that H. D.
Eich as treasurer of the County of Yuba be directed and
compelled to estimate the sum of principal due on January 1,
1980, January 1, 1931, and January 1, 1932, together with all
interest accrued and to proceed with a call of assessment and
sale thereunder. The peremptory writ was granted February
6, 1932. (See Balding v. Eich, 120 Cal. App. 491 [7 Pac.
(2d) 1073].) The record shows (an order confirming the
respondent’s proceedings under the writ having been made)
that the directions of the court were performed.

In the course of the opinion in the case, after referring
to the estimates made by the respondent on October 1, 1929,
here involved, and in subsequent years, the District Court
of Appeal said: ‘‘It further appears from the petition that
in the making of various estimates of the moneys necessary
to pay the maturing bonds and the interest upon the out-
standing bonds, as hereinbefore referred to, the respondent
erred in adding to his estimates the costs and expenses of
publishing the notices referred to, and that proceedings
have been taken and had in the Superior Court of Yuba

2 es

County by certain land owners whose lands were subject
to assessment, contesting the validity of the calls herein-
before referred to, and that judgments have been entered
to the effect that the calls referred to are and were invalid
by reason. of the errors in the estimates, and that the sale
of lands thereafter had by reason of the failure of land
owners to pay their assessments under the calls referred to
herein, are ineffective.

“It further appears that while a few of the land owners
owning lands in said reclamation district have paid the
assessment levied upon their lands, a large number have
allowed the assessments to go delinquent, and by reason
of the fact that the estimates, calls and sales on account
of delinquencies, are each and all ineffective for the reasons
stated, nothing is being paid, and nothing is being collected
by the respondent as trustee of the bond fund of said dis-
trict, nor is any action being taken by him to enforce pay-
ment, or to make a valid sale of the lands and premises
situated within the exterior boundaries of said district and
subject to such payments on account of delinquencies in
making such payments.’’

It is apparent that the court construed the judgment in
the instant case to mean that the certificates of sale were
void and ineffective for any purpose. Under the cireum-
stances we can see no reason for not adhering to the same
opinion and many reasons why we should. First of all, as
we have already indicated, the judgment plainly declares
them to be void and adjudges that they are canceled.
Again, a new estimate and call having been made and pre-
sumably new certificates of sale having been issued, it would
lead to great confusion and uncertainty to construe the
judgment to mean that the certificates were not to be
declared void unless payment was made by the land owners.
‘With such an interpretation of the judgment the appellants
have nothing of which to complain. Therefore the judg-
ment should be and it is affirmed.

Shenk, J., Seawell, J., Langdon, J., Preston, J., Curtis, J.,
and Waste, C. J., concurred.

SS

[Sac. No. 4771. In Bank—February 15, 1934.]

MINNIE BOONE, Appellant, v. BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION
(a National Banking Association) et al., Respondents.

Hugo McKinley and L. B. Schlingheyde for Appellant.

George Angels, in pro. per., C. Ray Robinson and James
D. Garibaldi for Respondents.

WASTE, C. J—This is an action for damages for the
wrongful death of plaintifi’s adult son, resulting from a
collision between decedent’s motorcycle and the rear end of
a wagon loaded with farm implements, being driven by the
defendant Angels along a public highway in Merced County.
The defendant bank held a chattel mortgage on the wagon

Te

and its contents. It was plaintiff’s theory, in joining the
bank as a defendant, that Angels was the agent of the
bank, This theory is founded on the. fact that Angels,
pursuant to directions from the bank and because of his
financial imability to further carry on his farming opera-
tions was, at the time of the accident, proceeding to a ware-
house for the purpose of there storing the wagon and its
contents in order to preserve them as security under the
bank’s chattel mortgage. The conclusion we have reached,
and the fact that the jury brought in a verdict against the
plaintiff and in favor of both defendants, makes it unneces-
sary for us to determine whether plaintiff upon the trial
had satisfactorily established the relation of principal and
agent between the defendants. For present purposes we
shall assume, without deciding, that this relationship existed
between the parties,

Upon this appeal from the judgment the plaintiff con-
tends that the court below committed reversible error when,
over objection, it permitted two of the defense witnesses
to testify as to the decedent’s habit or custom for an ex-
tended period just prior to the accident of repeatedly and
continuously driving his motorcycle at excessive rates of
speed over and along the highway upon which and in the
vicinity at which the accident occurred. With this evi-
dence excluded the appellant urges there is no evidence of
contributory negligence on the part of the decedent.

Hl 1 appears that both vehicles were proceeding along
a straight highway in a northerly direction when decedent
ran his motorcycle into the rear of the wagon being driven
by the defendant Angels. The accident occurred shortly
after 6 o’clock on the evening of December 17, 1931. An
almanac introduced in evidence indicates that the sun had
set at 4:41 P. M. on that day. There is evidence to the
effect that it was ‘‘dusk’’ or ‘‘almost dark’’ at the time of
the accident. The defendant Angels admitted on the stand
that his wagon was not equipped with a light. It is undis-
puted that the headlight on the decedent’s motorcycle was
lighted prior to and at the time of the accident and was
capable of throwing a beam of light a considerable distance
ahead of the vehicle. It was also shown that a motorcycle
traveling at a speed of forty-five miles an hour, the maxi-
mum legal rate of speed, can be stopped within a distance

SS °:

of sixty feet. We are satisfied that the jury on this evi-
dence, and without considering the ‘‘habit’’ evidence here
complained of, might reasonably conclude, and in view of the
verdict it will be presumed they did so conclude, that had de-
eedent been operating his motorcycle in a careful and pru-
dent manner, and had he been attentive to surrounding con-
ditions, he would have been aware of the presence of the
wagon on the highway and by the exercise of reasonable dili-
gence could have averted bringing his motoreycle into colli-
sion therewith. This would appear to be so in view of the
testimony that the highway was straight for a considerable
distance either side of the scene of the accident, and that
it was not yet dark, but merely ‘‘dusk’’, and particularly
in view of the defendant Angels’ testimony, which under
the verdict we are bound to accept, that it was ‘‘day-
light’? and visibility good.

HE We are therefore of the opinion that there is
sufficient in the record, exclusive of the ‘‘habit’’ evidence,
to support the verdict and judgment. This latter evidence,
if properly admitted, and we think it was under the cireum-
stances of this case, tends further to support the reasonable-
ness and propriety of the jury’s verdict herein. The rule
now appears to be crystallized in this state that evidence of
habit, i. e, evidence tending to show that an individual had
the habit of doing a specifie act in a careful or careless
manner, is admissible when there are no eye-witnesses to an
accident and when the evidence is not too remote as to time
and is limited to habit at the approximate place of the
accident and under circumstances substantially similar to
those in controversy. Some of the cases dealing with and
announcing this rule of evidence are: Wallis v. Southern
Pac. Co., 184 Cal. 662-672 [195 Pac. 408, 15 A. L, R. 117];
Starr v. Los Angeles Ry. Corp., 187 Cal. 270-281 [201 Pac.
599]; People v. Crossan, 87 Cal. App. 5-15 [261 Pac. 581] ;
Blackford v. Beckworth, 90 Cal. App. 87-40 [265 Pac.
514]; Gorman v. County of Sacramento, 92 Cal. App. 656-
663 [268 Pac. 1083]; Lindsey v. Pacific Elec. Ry. Co., 111
Cal. App. 482-499 [296 Pac. 131]. Examination of the
cited cases discloses that in those instances where evidence
of habit was held to have been improperly admitted there
were eye-witnesses to the accident who testified upon the
very issue sought to be established by the habit evidence or

6

the evidence of habit was too remote to give it any pro-
bative value. Such is not this case. Here there were no
eye-witnesses to the accident and no one testified as to the
rate of speed at which the decedent was traveling at the
time of the accident. True, the defendant Angels testified
that as he was driving along the highway he heard a noise
and upon looking back saw a motorcycle approaching about
500 hundred feet to the rear of his wagon. He then states
that he proceeded to drive and turn his wagon so that its
two right wheels would be off in the dirt to the right side
of the paved portion of the highway. The collision followed
almost immediately. Nowhere has the defendant Angels
testified as to the speed at which the decedent’s motorcycle
was traveling at the time of the accident. The record is
also singularly free of such testimony from plaintiff’s wit-
nesses. This is necessarily so in the absence of eye-
witnesses. Plaintiff’s witnesses merely gave the approxi-
mate speed of the motorcycle as it passed them several
miles from the scene of the accident. This being so, and
in the absence of testimony of eye-witnesses as to the speed
of the decedent’s motorcycle at the time of the accident,
we are satisfied that “habit”? evidence was admissible for
whatever probative value the jury desired to attach to it,
as tending to establish the decedent’s usual and customary
mode of operating the vehicle. This evidence concerned
itself with decedent’s method of operating his motorcycle
at excessive speeds on the same highway upon which the
accident occurred, and in the vicinity thereof, and covered
a period of time immediately preceding the accident. It
was not therefore so remote, under the authorities, as to
make it inadmissible.
The judgment is affirmed.

Curtis, J., Thompson, J., Shenk, J., Tyler, J., pro tem.,
and Spence, J., pro tem., concurred.

SEAWELL, J., Concurring—I am in accord with the
judgment of affirmance. I do not, however, subscribe to
the proposition that ‘‘habit’’ has the force of evidence only
in eases where there are no eye-witnesses and is inadmissible
in eases where there are such witnesses to an accident.

97

The court or jury should be permitted to weigh it against
the testimony of one or any number of witnesses. Surely,
if it is to be regarded as having any evidentiary force at
all, it should prevail against the testimony of a single dis-
credited witness. I see no reason, if it is to be received
in courts of law as evidence, why its application should be
limited to cases in which there are no eye-witnesses.

[Sac. No. 4817. In Bank—KFebruary 16, 1934.]

G@. L. LACY, Respondent, v. PACIFIC GAS AND ELEO-
TRIC COMPANY (a Corporation), Appellant.

Thomas J. Straub, W. H. Spaulding, Clinton F. Stanley
and W. H. Hatfield for Appellant.

Butler, Van Dyke & Harris and Butler, Van Dyke, Des-
mond & Harris for Respondent.

CURTIS, J.—After a re-examination of the authorities ap-
plicable to the legal issues involved in this cause, we find
ourselves in accord with the opinion of the District Court of
Appeal handed down by said court when this action was
pending therein. The queston concerning which we were in
doubt when we granted a hearing herein was whether the ap-
pellate court had properly applied the doctrine of proximate
eause to the facts in this case, where the defendant was held
liable for injuries sustained by plaintiff by reason of the
negligence of Gage in driving his automobile over the power
line pole which the defendant’s employees had negligently
left in plaintiff’s driveway. [J The authorities in this
state hold that where the original negligence continues and
exists up to the time of the injury, the concurrent negligent
act of a third person causing the injury will not be regarded
as an independent act of negligence, but the two concurring
acts of negligence will be held to be the proximate cause of
the injury. (Carroll v. Central Counties Gas Co., 74 Cal.
App. 308, 308 [240 Pac. 53]; Id., 96 Cal. App. 161, 167 [278
Pae. 875, 274 Pac. 594], in addition to Pastene vy. Adams,
49 Cal. 87, and other cases cited in the opinion of the
District Court of Appeal.)

Hl Applying this well-established doctrine to the facts in
this case there can be no question but that the proximate
cause of plaintiff’s injury was the concurring negligence of
defendant in leaving said pole in the driveway and the negli-
gence of Gage in so operating his automobile as to collide

| (|!

with said pole. In such a case either of the negligent per-
sons would be liable to the plaintiff for his injuries.

Defendant has cited for the first time in its petition for
hearing a number of authorities from jurisdictions other than
our own. Assuming that these authorities are all that the
defendant claims them to be, they would be in direct con-
flict with the decisions of the courts of this state upon the
question now before us. This court would therefore not be
justified in accepting them as either controlling or decisive
of said question.

The opinion of the District Court of Appeal, written by
Mr. Justice Sturtevant, we therefore adopt as the decision
of this court. It is as follows:

“This is an action to recover for personal injuries. The
jury returned a verdict in favor of the plaintiff and from the
judgment entered thereon the defendant has appealed.

“‘On March 17, 1930, and for many years prior thereto,
the plaintifi was engaged in farming on his ranch near Elk
Grove. His farm is located on the south side of Sheldon
road, a public highway running east and west. On the
eastern boundary is a wire fence. In the extreme northeast
corner is a gate leading from the highway into the farm.
From that gate there is a piece of open ground about fifty
feet by five hundred feet which is not planted. On the west-
ern side of the opening the ground is planted to vineyard.
In the extreme southern end of the open ground there is
a pumphouse. The pump is operated by an electric motor.
Near the pumphouse is a vat for dipping prunes. Along
the eastern side of the open ground are wagon tracks showing
travel, but it was the claim of the plaintiff that the entire
strip of open ground was laid out for and used as a roadway
for farming purposes. For the purpose of furnishing the
plaintiff current the defendant had installed a branch line
leading from Sheldon road along the border of the vineyard
south to the pumphouse. For that purpose three poles were
erected. On the 17th of March, 1930, the transformer pole
near the pumphouse was thirty-five feet long. Being dis-
satisfied with it the defendant entered the premises, installed
a pole forty feet in length, and having done so its employees
took out the other pole and toppled it over with the top
end extending toward the east. Notwithstanding requests
by the plaintiff, the defendant’s agents did not remove the

100 |

pole, but it was left lying on the ground. It continued to
remain there until after the accident complained of. On
May 1, 1930, the plaintiff commenced to prepare to irrigate.
When he attempted to start his pump he encountered such
difficulties that he sent to the Beach Garage at Elk Grove
for mechanical assistance. Thereafter Mr. Gage drove out
to the plaintiff’s farm in his garage service car. He entered
the gate on the Sheldon road and drove along the western
side of the open ground above mentioned southerly toward
the pumphouse. On approaching the pole lying on the
ground Mr, Gage swerved toward the east, passed around
the eastern end of the pole and turned directly west in front
of the pumphouse. There he stopped his car, leaving the
throttle open, threw the shift into reverse and at the same
time cramped the wheels distinctly to the right, then he got
out of his automobile and he and the plaintiff made an ex-
amination of the condition of the pump. It transpired that
when the defendant’s employees installed the new pole the
wires were so connected that the pump was operating back-
wards. To make the changes Mr. Gage needed a particular
kind of a serewdriver. The plaintiff informed him that’ he
had one at his house. Thereupon Mr. Gage directed him
to get in the automobile and that they would go for the
screwdriver. The plaintiff attempted to enter the automobile
on the right-hand side. At the same time Mr. Gage stepped
to the front and cranked the automobile. By that time the
plaintiff had stepped upon the running board and at the
same instant the automobile dashed back. Mr. Gage asked
the plaintiff to shut off the ignition. Before he could do so
the car hit the pole and the plaintiff was thrown off the
automobile onto the ground. When the automobile hit the
defendant’s pole the pole was raised into the air momentarily
and then fell across the plaintiff, breaking both of his Jegs.
For the injuries so suffered the plaintiff sued to recover.
“*As we view the case we find no material conflict in any
of the evidence. The defendant contends that the leaving
of the thirty-five foot pole as it was left by defendant’s line
erew was not an effective and contributing cause of the
injury to plaintiff unless in accordance with the usual experi-
ence of mankind the result ought to have been foreseen and
apprehended. The plaintiff replies that the defendant negli-
gently placed the pole and negligently left it in that place

|

from March until May after being notified to remove it and
that Mr. Gage so negligently operated his automobile as to
cause it to collide with the pole and as a proximate result
of the coneurrrent negligence of the employees of the de-
fendant and Mr. Gage the pole was thrown into the air
and caused to fall upon the plaintiff, thus causing the in-
jury complained of. Continuing the plaintiff claims that
the question before the court is solely a question of fact
which the jury on sufficient evidence has found against the
defendant and that under well-settled rules a court of review
may not disturb the finding.

| | “The first part of the plaintiff’s reply is entirely
sound and is supported by a long line of decisions in this
state. (Pastene v. Adams, 49 Cal. 87; Merrill v. Los Angeles
Gas & Elec, Co., 158 Cal. 499 [111 Pac. 534, 139 Am. St. Rep.
184, 31 L. RB. A. (N. 8.) 559]; Katz v. Helbing, 205 Cal. 629
* [271 Pae. 1062, 62 A. L. R. 825] ; Royal Indemnity Co. v. Pub-
lic Ser, Corp., 42 Cal. App. 628 [183 Pac. 960]; Polloni v.
Ryland, 28 Cal. App. 51 [151 Pac. 296].) [J The second
part of his reply is also sound. Whenever the standard of
duty is not fixed and there is introduced substantial evidence
on the subject of proximate cause it is a question for the jury.
(45 C. J. 1280; 1 Shearman & Redfield on Negligence, 112;
Andreen v. Escondido Citrus Union, 98 Cal, App. 182, 187
[269 Pac. 556].) When, as here, it is claimed that an injury
was caused both by the continuing negligent act of one de-
fendant and the independent concurring negligent act of a
third person, many facts are to be considered in determining
the proximate cause. (45 C.J. 897-925.) The proof on that
element includes all ‘the attending circumstances’. (45 C. J.
914; Royal Indemnity Co. v. Public Ser. Corp. supra;
Marton v. Jones, 44 Cal. App. 299 [186 Pac. 410].) In the
instant case much evidence regarding attending cireum-
stances was introduced. The question was submitted under
full and specific instructions. If the jury believed the evi-
dence so introduced by the plaintiff, and from its verdict we
must assume it did, this court may not say as a matter of
law that the issue of proximate cause was not proved.

“The defendant quotes from Royal Indemnity Co. v. Pub-
lic Ser. Corp., supra, as follows: ‘It also appears from the
record that the pole is located in a field planted with barley,
and that the barley was planted right up to the line of the

2

pole. The barley was being cut and horses were being used
in connection with the cutting—all of which is a usual and
necessary use of the land on which the pole is situated.
We think that the jury was justified in concluding that the
defendant should have anticipated that the guy wire might
be subjected to sufficient strain by contact with the usual
instrumentalities employed in farming operations, to cause a
breaking or tearing away of the strands of the wire and a
consequent sagging of the wire, and should have insulated its
guy wires so as to avoid injury to others in the event of such
an occurrence.’ The defendant then argues: ‘The foregoing
quotation is the very meat and gist of the Indemnity Com-
pany case. But what earthly application can it have to the
case at bar? Surely the leaving of an automobile in reverse
gear ‘‘because the brakes were not in very good order’’ and
the front wheels ‘‘cramped towards the right’’, and with the
throttle of the engine ‘‘wide open, very wide’’, and then
starting to crank it as Mr. Lacy was getting into it, is a
situation that has nothing to do with Mr. Lacy’s usual ranch-
ing or farming operations and could not have been antici-
pated by defendant. The bare statement of the facts in
the instant case and the Indemnity Company case shows the
distinction between them.’ These arguments are not con-
vineing. As a matter of law this court may not say that
there is any more reason to assume that a farmer will or will
not mow his barley than there is to say that he or his
agents will or will not drive a motor ear over his pump and
prune road. (See, also, Carroll v. Central Counties Gas Co.,
74 Cal. App. 303 [240 Pac. 53]; s. c. 96 Cal. App. 161 [273
Pac. 875, 274 Pac, 594]; Rauch v. Southern Cal. Gas Co.,
96 Cal. App. 250 [278 Pac. 1111]; Marton v. Jones, supra.)

“The defendant cites and earnestly relies on Klarquist
et al, v. Chamberlain & Proctor et al., 124 Cal. App. 398 [12
Pac. (2d) 664]. However, we think that the case is not at all
in point. As we have read the case the owners were construct-
ing a building. Bavin & Burch were the contractors. Pursu-
ant to permits issued to them the contractors laid down a new
sidewalk. In everything they did they acted legally. The
work had so far advanced that the sidewalk was not usable.
Plaintiff’s decedent while traversing the sidewalk adjacent
to the building was therefore compelled to step out into
the street. As he did so the truck of one of the defendants

{fl

approached in a negligent manner, knocked him down, and
from the injury he died. The plaintiff sued the owner of
the building, the owner of the truck, and Bavin & Burch.
Judgment went against the defendants. The contractors ap-
pealed. The District Court of Appeal held that the con-
tractors were not negligent, and as to them the judgment
was reversed. But in the instant case it is not even sug-
gested that the defendant was not negligent in leaving the
transformer pole lying on the plaintiff’s driveway.

“The defendant also cites South-side Passenger Ry. Co. v.
Trich, 117 Pa. 390 [11 Atl. 627, 2 Am. St. Rep. 672], Teis
y. Smuggler Mining Co., 158 Fed. 260 [15 L. BR. A. (N. 8.)
893], and Falk v. Finkelman, 268 Mass, 524 [168 N. E. 89].
Each case contains instructive phrases, otherwise the first
two are not helpful. The case last cited is more nearly in
point and requires further comment. Three cases were tried
together. One of the defendants had left his automobile
parked at the curb. Fire apparatus approached from two
directions and in the collision that followed the first auto-
mobile was driven up onto the sidewalk and injured the
plaintiff. The parking of an automobile at the particular
place for more than twenty minutes was prohibited by the
terms of an ordinance recently passed, but the passage of
which was never called to the attention of the defendant. In
passing on the case the supreme court of Massachusetts said:
‘The defendant violated no legal duty owed the plaintiff,’
and thereupon it ordered judgment for the defendant. In
the case of Milbury v. Turner Centre System, 274 Mass.
358 [174 N. E. 471, 73 A. L. R. 1070], the supreme court
of Massachusetts cited the Falk case, and commenting
thereon, said: ‘The case differs from Falk v. Finkelman,
supra. There the parking of the defendant’s automobile
at the curb was an innocent act, bare of negligence. Allow-
ing it to remain there beyond twenty minutes, in ignorance
of the ordinance forbidding parking for a longer time, al-
though it subjected the owner to punishment, had nothing to
do with the collision of fire apparatus or with causing the in-
jury for which recovery was sought. In Rea v. Checker Taxi
Co., 272 Mass. 510 [172 N. E. 612], on the other hand,
knowing violation of the one-way street ordinance placed the
automobile where a collision could occur, one of the very
things which the ordinance sought to prevent. It could be

ae

found to be negligence directly contributing to the accident.
A collision might well be found to be not something unusual
and unlikely to happen as a result of such blocking of a cor-
ner as here took place—something only remotely and slightly
probable—but, rather, a consequence naturally to be ex-
pected.’ It is clear, we think, that the Falk case is not con-
trolling in this case. On the other hand, the case last cited
and Felix v. Soderberg, 207 Wis. 76 [240 N. W. 836], clearly
support the views hereinabove expressed.’’
The judgment is affirmed.

Shenk, J., Seawell, J., and Waste, C. J., concurred,
Rehearing denied,

[Sac. No, 4772. In Bank—Webruary 16, 1934.]

CALIFORNIA CORRUGATED CULVERT COMPANY (a
Corporation), Respondent, v, W. H. STEWART et al,
Defendants; THE OAKLAND BANK, Appellant.

SS 105

McKee, Tashiera & Wahrhaftig and George R. Freeman
for Appéllant.

Robert B. Gaylord for Respondent.

THOMPSON, J.—This action was brought to foreclose a
mechanic’s lien upon the ranch of defendant Stewart, arising
out of the construction by plaintiff of a rice elevator and,
in connection therewith, of making additions to his barn.
The contest is actually between plaintiff and the appellant
bank, a subsequent encumbrancee of the ranch.

The case was here on a former appeal from that part
of the judgment only which limited the area to be fore-
closed under the ‘mechanic’s lien and from ‘‘the orders
amending and directing the amendment of the findings of
fact and conclusions of law and judgment in said action,
in connection with the denial . . . of the motion for a new
trial of said action’. (California Corrugated Culvert Co.
v. Stewart, 215 Cal. 120 [8 Pac. (2d) 1013, 1014].) It was
determined by that decision, that although the plaintiff
by appropriate language had proffered the issue that the
whole of the 729-acre ranch was ‘‘necessary for the con-
venient use and occupation of said barn and grain ele-
vator’’, yet the appellant had failed to raise the issue by
a proper denial, wherefore the allegation of the complaint
stood admitted and the case was tried as though ‘“‘the ex-
tent of the land necessary for the convenient use and occupa-
tion of the buildings was’’ not ‘‘an issue”. Hence, when,
after trial, the court attempted to amend the findings and
judgment to limit the area it was in error. The cause was
reversed ‘‘with directions to the trial court (1) to enter
judgment for the plaintiff on the findings of fact and conelu-
sions of law originally made and filed, or (2) upon a proper
and sufficient application for leave to amend the answer so
as to put in issue the question of the extent of the area re-
quired for the convenient use and occupation of the barn and

100

elevator, then, upon such issue joined, to determine that
sole question and enter judgment accordingly’’. Reference
may be had to the former opinion for a more complete
statement of facts showing the controversy between respond-
ent and appellant.

After the going down of the remittitur the appellant asked
and was granted leave, over the strenuous objection of re-
spondent, to amend its answer. Upon the trial of the sole
issue respondent refused to introduce any evidence in addi-
tion to that originally taken at the trial, but submitted its
case upon the former testimony and its objection that the
trial court was without jurisdiction to permit the amendment
or try the issue. Judgment was rendered to the effect that
the whole area of the ranch was subject to respondent’s lien.

HI The appeal is from the judgment so entered and it
is appellant’s claim, in effect, that the evidence is not suffi-
cient to sustain the conclusion that the whole of the ranch
was necessary for the convenient use and occupation of the
buildings. We cannot agree with appellant. ‘The testimony
in support of the determination that the whole of the ranch
was necessary to the use of the buildings discloses that the
defendant Stewart was engaged in the raising of rice upon
his ranch and was desirous of handling his crop in bulk.
He approached the respondent with a query concerning how
it might be done and was informed that it could ‘design and
puild him an elevator for doing that work’’. It was agreed.
that respondent should prepare the plans, and supply the
labor and materials for its construction. The defendant
Stewart testified: ‘‘[T]he entire ranch was then used for
raising rice and it was my purpose in getting this elevator
to handle the rice crop through the elevator.’? With respect
to the additions to the barn, Stewart also testified that he
told respondent’s agents that he had no shelter for his teams
and that he would have to get the iron from them to build
additions to the barn, which barn was used for hay, for
storage, and for the horses. There was testimony produced.
by appellant to the effect that Stewart solicited from a couple
of farms the business of putting their rice through the ele-
vator and that several changes were made in the elevator.
The most that may be said of the testimony of appellant

De

is that it raised a conflict in the evidence, which was resolved
in respondent’s favor by the trial court. It seems clear from
the testimony relied upon to support the judgment that the
entire ranch was to be improved and to be benefited by the
erection of the elevator and the additions to the barn. In
Western Well Works v. California F. Co., 60 Cal. App. 749
[214 Pac. 491], the District Court of Appeal, speaking
through Mr. Justice Richards, said: ‘‘The question is not
so much as to the amount of land required for the area to
be occupied by the well and its appliances, but rather as to
the amount of land to be improved or benefited by the
creation and use of the well.’? This language, as well as
other of like tenor in the opinion, is particularly pertinent
because the defendant Stewart’s own testimony shows that
it was his purpose and intent to improve the entire ranch.
We find nothing contrary in the cases. of Tunis v. Lakeport
A, P. Assn., 98 Cal. 285 [83 Pac. 447], Gregg v. H. & M.
Drilling Co., 92 Cal. App. 189 [267 Pac. 903], or Cowan v.
Griffith, 108 Cal. 224 [41 Pac. 42, 49 Am. St. Rep. 82].
The conclusion to which we have come renders it unneces-
sary to discuss the questions raised by the respondent,
Judgment affirmed.

Shenk, J., Curtis, J., Preston, J., Seawell, J., and Waste,
C. J., concurred,

[L. A. No, 14572, In Bank—February 16, 1934.]

EMPLOYERS’ LIABILITY ASSURANCE CORPORA-
TION (a Corporation), Petitioner, v. INDUSTRIAL
ACCIDENT COMMISSION et al., Respondents.

Redman, Alexander & Bacon and R. P. Wisecarver for
Petitioner,

Everett A. Corten for Respondents.

CURTIS, J.—An award was made by the Industrial Acci-
dent Commission in favor of William H. Palms and against
his employer, the Atascadero Mill & Lumber Company, and
against the petitioner herein, the Employers’ Liability Assur-
ance Corporation, and the Indemnity Insurance Company of
North America, as insurance carriers of said employer. The
Indemnity Insurance Company had issued to the employer .
a policy of compensation insurance for the year beginning
December 18, 1931, and ending December 18, 1932. This
policy was written through Paul Bone, the agent of the com-
pany. The policy contained a provision which permitted
either party to cancel the policy without cause by giving
notice to the other party. About three months after the
date of the policy, the Indemnity Insurance Company gave
notice of cancellation of the policy on the ground that the
employer had failed to pay the premium, The employer

EE

had, however, paid the premium in full to Bone, the agent,
who evidently had failed to pay it over to his company. The
employer immediately notified Bone of the notice of cancel-
lation, and asked the reason why such a notice had been
sent. Bone assured the employer that it was all a mis-
take and that he would communicate with the company and
straighten up the matter, and assured the employer that its
policy was intact and was not subject to cancellation. Noth-
ing further was heard from the company regarding the
policy. It did not send a member of its auditing staff, as it
said it would in the notice of cancellation, to ascertain the
amount of the premium earned under the policy, nor did it
return any part of the premium paid by the employer, nor
take any action whatever indicating that it had canceled
said policy of insurance. Five months afterwards Bone
absconded, and the employer fearing that its policy with the
Indemnity Insurance Company might be affected by Bone’s
disappearance, took the matter up with the agent of the
petitioner. The agent of petitioner stated that Bone’s af-
fairs were in such shape he could not determine whether the
policy of the employer was in force or not. He promised
verbally ‘‘to take care’’ of the employer in case the policy
with the Indemnity Insurance Company was not in force,
and later wrote to the employer, a letter to that effect. No
policy was ever issued by the petitioner, nor was any premium
ever paid petitioner by said employer. A few days later,
after the date of this letter, and on October 31, 1932, the
employee Palms was injured. [J Under this state of facts,
the Industrial Accident Commission held both insurance
companies. If the policy issued by the Indemnity Insurance
Company was canceled by the notice sent to the employer,
then that company is not liable. If it were not canceled,
that company is liable, and the petitioner here is not liable,
as the uncontradicted evidence of the employer was that it
did not intend to take out duplicate insurance. The Indem-
nity Insurance Company filed a petition for a hearing herein
after the District Court of Appeal had denied its petition to
annul said award against said company. This petition we de-
nied, with the result that the award in favor of the employee
against the Indemnity Insurance Company has become final.
It follows as a necessary corollary from our decision sus-

oe

taining the award against the Indemnity Insurance Company
that the award against the petitioner should be annulled,
as we think the evidence conclusively shows that the em-
ployer had no intention of insuring with the petitioner, if its
insurance with the Indemnity Insurance Company was in
effect at the time the agent of the insurance company ab-
sconded.

In justice to the Industrial Accident Commission we think
it should be said that in the first instance its award was
against the Indemnity Insurance Company only, but on a
petition for a rehearing before said commission, when it be-
came apparent that the Indemnity Insurance Company
might seek an annulment of said award in the court, it
granted said petition for a rehearing and rendered a final
award against both insurance companies, evidently intending
that should it be finally determined that said award should
be annulled as against either of said companies then the
other company should be held to the award in so far as said
award was against it. It is apparent that the commis-
sion in granting the award against both insurance com-
panies was endeavoring to protect the employee under either
of these two contingencies. The award against the Indem-
nity Insurance Company having been affirmed, that against
the petitioner should be annulled.

It is, therefore, ordered that the award of the respondent
commission in so far as said award renders this petitioner
liable for the payment thereof, is annulled, but in all other
respects it is affirmed. .

Preston, J., Langdon, J., Shenk, J., Thompson, J., Seawell,
J., and Waste, C. J., concurred,

= EEE

[L. A. No. 14403. In Bank.—February 16, 1934.]

MARION REIDY et al., Petitioners, v. THE SUPERIOR
COURT OF LOS ANGELES COUNTY et al. Re-
spondents.

William Ellis Lady and H. C. Millsap for Petitioners.

Everett W. Mattoon, County Counsel, Fred M. Cross,
Deputy County Counsel, Louis Ferrari, Edmund Nelson,
Howard Waterman and Hugo R, Steinmeyer for Respond-
ents,

CURTIS, J.—By this proceeding petitioners seek to pro-
hibit the respondent court from proceeding to the trial of
an action pending therein entitled Bank of America National
Trust & Savings Assn. vy. Reidy et al. Petitioners contend
that the issues involved in said action already have been

12 [| 7

tried and determined in a prior action between the samo
persons who are parties to the second action. In other
words, petitioners contend that, as the judgment in the
prior action is a bar to the second action, the trial court has
no jurisdiction to proceed with the trial of the second
action. JJ In this contention the petitioners are in
error. While the plea of a former judgment may be a
complete defense and a bar to a pending action, the court
in which the second action is pending has jurisdiction to
pass upon the merits of said plea and determine whether
or not it is well taken. This question has been frequently
before the appellate courts of this state and has been de-
termined adversely to the contention of the petitioners.
(Baird v. Superior Court, 204 Cal. 408, 412 [268 Pac. 640] ;
Granger v. Superior Court, 159 Cal. 1 [112 Pac. 854];
United States F. & G. Co. v. Superior Court, 118 Cal. App.
436 [298 Pac. 63]; Spitzer v. Superior Court, 74 Cal. App.
494, 498, 499 [241 Pace. 270].)

‘We need only refer to language found in the first of the
above-cited cases for a correct statement of the doctrine
determinative of this question. There the court said, “‘Res
adjudicata must be affirmatively relied upon and shown in
evidence and in some cases must be pleaded, but in no case
is the plea in and of itself sufficient to oust the court of
jurisdiction. In its strongest form it is nothing more than
conclusive evidence upon all or some of the issues involved.
‘When a former judgment is pleaded either in bar or as an
estoppel on some issue, there immediately arise questions
as to identity of the parties, the validity of the judgment
as shown by the judgment roll, the legal effect to be given
it and perhaps many other questions. Such matters are
for the determination of the trial court, and whether cor-
rectly or incorrectly determined, it is nevertheless the
exercise of jurisdiction over the subject-matter and the
parties.””

Petitioners cite and rely upon the following cases in
support of their contention that a court is without juris-
diction to try issues which have become finally determined
by a former judgment: Oldfield v. Superior Court, 217 Cal.
581 [20 Pae. (2d) 671]; Robson v. Superior Court, 171
Cal. 588 [154 Pac. 8]; Granger v. Superior Court, supra.
These authorities, in so far as they affect the question now

ee 113

under consideration, can be readily distinguished from the
instant case and from those cases cited above which hold
that the court is not ousted of jurisdiction by a plea of res
judicata.

In the first two cases cited by petitioners the question at
issue arose upon the second trial of the action after a new
trial had been granted as to certain issues only. At the
second trial the court undertook to try the issues which
had already been decided and determined by the judgment
rendered at the first trial, and which judgment as to those
issues had not been set aside, and accordingly had not been
affected in any way by the granting of a new trial as to
other issues. In the Granger case the court was asked to
prohibit the trial of two actions pending in the Superior
Court of Nevada County. One action was entitled Benal-
lack v. Richards and the other Granger v. Richards. Each
ease had been appealed to the Supreme Court and reversed.
In the case of Benallack v. Richards on the second trial
therein the trial court was proceeding to try issues that
had already been settled and determined at the first trial
of said action. In holding that the trial court was without
jurisdiction to try these issues the court said, ‘‘So far as
Granger and the estate of Richards is concerned the litiga-
tion in Benallack v. Richards appears to be at an end and
the court is without jurisdiction to proceed further. Treat-
ing the application as separable, a writ of prohibition can
issue to prevent further proceedings against Granger on
behalf of the estate or the executors thereof in that action.’’
But in the case of Granger v. Richards on the second trial,
Granger relied upon the judgment in Benallack v. Richards
and contended that it settled all issues then before the
court in the case of Granger v. Richards and asked, for
that reason, that the trial court be restrained from pro-
ceeding to again try these issues. In denying this conten-
tion, the court held that, while the judgment in Benallach
v. Richards might be pleaded as a complete adjudication
of the issues then before the court, it did not affect the
jurisdiction of the court to proceed in the action. The
Janguage of the court upon this point is clear and decisive,
and is as follows: ‘‘It may be conceded that with respect
to everything except the taking.of a supplemental account
and making of a decree requiring Granger to reconvey the

Let

es

property to the estate upon the payment of the money found
due him upon the accounting, the whole controversy has
been settled by the judgment in the action of Benallack v.
Richards. But this does not affect the jurisdiction of the
court to proceed in the action. That judgment can he
pleaded as an adjudication of the matters determined by it,
but it cannot be given the effect of depriving this court of
jurisdiction.’’ It will thus be seen that Granger v. Superior
Court, supra, is direct authority against petitioners. The
two other cases cited by petitioners are readily distinguished
from the instant case. It follows, in our opinion, that
petitioners have failed entirely to sustain their contention
that the trial court is without jurisdiction to proceed in the
trial of the action of Bank of America National Trust &
Savings Association v. Reidy et al.

The petition is denied and the alternative writ issued
herein is discharged.

Preston, J., Thompson, J., Shenk, J., Seawell, J., and
Waste, C. J., concurred.

[L. A. No, 14342, In Bank.—February 21, 1934.]

FANNETTE WINTHROP, Petitioner, v. INDUSTRIAL
ACCIDENT COMMISSION, WETHERBY-KAYSER
SHOE COMPANY et al., Respondents.

115

Goldman & Lieberman and Aaron B. Rosenthal for Peti-
tioner.

H. C. Kelsey, as Amicus Curiae on Behalf of Petitioner.
A. I. Townsend for Respondents.

R. P. Wisecarver, as Amicus Curiae on Behalf of Re-
spondents.

SHENK, J.—This is a petition for review of the second
order of the respondent Industrial Accident Commission
denying the application of the petitioner, Fannette Win-
throp, for compensation.

The claim for compensation grew out of an operation
by which an ovarian cyst or tumor was removed from the
abdominal cavity of the petitioner. The tumor had become
strangulated by its pedicle or stem having become twisted.
This resulted in a gangrenous condition necessitating the
operation. It was the claim of the petitioner that the
twisting of the pedicle was caused by a fall from a stool
which occurred more than two weeks before the operation
and while she was in the employ of the respondent Weth-
erby-Kayser Shoe Company of Los Angeles. The commis-

1 ee

sion based its first order denying compensation on its finding
that no part of the disability suffered by the petitioner
arose out of the employment. On the first review the order
denying compensation was annulled. (Winthrop v. Indus-
trial Acc. Com., 218 Cal. 851 [2 Pac. (2d) 142].) The
opinion on the former review is referred to for a statement
of the facts of the case and the grounds of the order of
annulment. .

After the decision on the first review the commission pro-
ceeded to re-examine the issue. Further testimony was
received on the question whether the condition of the tumor
necessitating the operation was connected with the fall
suffered by the petitioner. On the former hearing the
testimony of Dr. Toland, the attending physician who per-
formed the operation, was not before the commission. This
omission was due to. the doctor’s refusal to testify either
because he ‘‘did not want to get mixed up in it’’ or because
of some mistaken belief that the substance of his testimony
constituted a privileged communication. On the second
hearing Dr. Toland testified fully as to the position and
condition of the tumor as he found it with relation to the
time when the petitioner fell and the time when the opera-
tion was performed. His testimony was to the effect that
the condition of the tumor was not due to the fall, but was
a development from natural causes. The testimony of Dr.
Toland indicated that the time clement was a conclusive
factor, and upon it the commission could reject the conten-
tion that the fall effected the twisting of the pedicle. J
The record as now presented supports the finding of the
commission that the petitioner suffered no disability which
was caused or aggravated by the employment and its con-
clusion that no compensable injury was sustained by her.
(Walter v. Industrial Acc. Com., 209 Cal. 685 [289 Pac.
627].) The only question remaining is whether the com-
mission had jurisdiction to retry that issue of fact after
the annulment of its order denying compensation to the
petitioner.

Hl The petitioner contends that the jurisdiction of the
commission following the annulment upon the former review
is restricted to proceedings to determine the proportion of
the disability which was traceable to the pre-existing dis-
ease or condition, the percentage due to aggravation in-

a

duced by the fall, and the amount of compensation to which
the petitioner is entitled.

The position of the respondents is that the annulment of
the former order, as in the case of an unqualified reversal
of a judgment in a civil action, leaves the matter again ‘‘at
large’ for proceedings in the nature of a retrial of the
issues of fact.

The question is: What are the powers and jurisdiction of
the commission when the court has annulled its order deny-
ing an award on the ground that the finding that no portion
of the petitioner’s disability was caused by injury arising
out of the employment is not supported by the evidence?

An extended discussion will not be required to set forth
our views leading to the conclusion that the commission has
jurisdiction to receive any further evidence and pursue any
inquiry on any issue of fact which was before it on the
prior hearing. [J Broad powers are conferred upon the
commission by the act to the end that its objects and pur-
poses may be accomplished. The commission is not bound
by common law or statutory rules of evidence and pro-
cedure. The path of the commission toward a free and
full inquiry to ascertain the substantial rights of the
parties is made clear by the framework of the act. The
spirit of this legislation forbids a limitation upon the com-
mission’s power to inquire into the facts within narrower
confines than those which define the jurisdiction of a trial
court in a similar situation. There, upon an unqualified
reversal of its judgment, issues of fact may be retried, and
the lower court is bound by the law of the case unless the
evidence on the second trial supplies the additional and
necessary proof which was lacking in the former record.
(Central Sav. Bank of Oakland v. Lake, 201 Cal. 488, 443
(257 Pac. 521].) That such a limitation was not intended
follows under the liberal construction enjoined upon the
courts by the provisions of the act. This becomes more
apparent when the situation is reversed and an award
granting compensation in a particular case is annulled be-
cause the commission has exceeded its jurisdiction in finding,
in the absence of competent evidence, that the injury arose
out of and in the course of the employment. In our opinion
it would be a violation of the spirit and intent of this legis-
lation were its provisions to be construed as precluding the

ES

commission thereafter from allowing the employee to make
a different record, if possible, which would support a finding
in his favor on that issue. Inasmuch as the substantial
rights of all parties are the subject matter for determination
by the commission (sec. 60 [a], Stats. 1917, chap. 586),
there is no basis for a holding that a different and narrower
jurisdiction must be exercised by the commission in one
ease than in the other.

This court has heretofore indicated that the issues of
fact are open to further hearing by the commission upon
the annulment of an award by the reviewing court. (Engle-
bretson v. Industrial Acc. Com., 170 Cal. 798, 799 [151 Pac.
421]; Carstens v. Pillsbury, 172 Cal. 572, 578 [158 Pac.
218]; California C. I. Exchange v. Industrial Acc. Com.,
190 Cal. 483, 488 [218 Pac. 257]; see, also, Clapp’s P. Sta-
tion v. Industrial Acc. Com. 51 Cal. App. 624, 629, 630
[197 Pac. 369]; King v. Alabam’s Freight Co., 40 Ariz.
368 [12 Pac. (2d) 294, 296]; McGarry v. Industrial Acc.
Com. of Utah, 64 Utah, 592 [232 Pac. 1090, 1091, 39 A. L. R.
806]; Brocco v. May Department Stores, 227 Mo. App. 395,
55 S. W. (2d) 822, 825, 326.)

The order denying compensation is affirmed.

Thompson, J., Preston, J., Langdon, J., Curtis, J., and
Waste, C. J., concurred.

Rehearing denied.
|

[8. F. No, 14945, In Bank—February 21, 1934.]

CAMILLA NIELSEN et al., Petitioners, v. INDUSTRIAL
ACCIDENT COMMISSION, CARL BERSCH et al.
Respondents.

1

o

* John C. Scott and H. C. Kelsey for Petitioners,

Arthur I. Townsend, B. E. Pemberton, Ivan A. Schwab
and Everett A. Corten for Respondents.

2

R. P. Wisecarver, as Amicus Curiae on Behalf of Re-
spondents.

SHENK, J.—This is the second review in this matter.
A petition for a review of the respondent commission’s
first order was granted by the District Court of Appeal.
The order of the commission denying any compensation to
the widow and dependents of the deceased employee was
annulled by that court and the application was remanded
for further proceedings and findings. (Nielsen v. Indus-
trial Ace. Com., 125 Cal. App. 210 [13 Pac. (2d) 517].) A
petition to have the cause heard in this court was denied on
September 22, 1932. Thereafter the commission conducted
a hearing and received further evidence. At said hearing
the applicants objected to the receipt of any evidence other
than for the purpose of determining the amount of com-
pensation to be awarded to them. The commission admitted
additional evidence relating to the question whether the
disability which caused the employee’s death was in any
part due to his employment. Thereupon the commission
made its finding that ‘‘the evidence is insufficient to hold
that the employee sustained injury occurring in the course
of and arising out of said employment’. It accordingly
made its order that the applicants take nothing. This order
is now before us for review.

Hl The first contention is that after the decision of the
District Court of Appeal on the former review and the
annulment of the commission’s previous similar order, the
eommission’s jurisdiction was limited to an inquiry into
the amount of compensation to be awarded based on the
proportion of the disability due to the employment. This
question is settled adversely to the contention, and to the
effect that the commission, after such an ‘annulment, may
investigate further the facts bearing on the issue of the
cause of the injury, and if the entire record as then pre-
sented supports its finding its order must be affirmed.
(Winthrop v. Industrial Acc. Com., ante, p. 114 [29 Pac.
(2d) 850.].) The effect of the decision just cited is that
the commission is bound to follow the holding of the court
on review so far as applicable, but is not foreclosed from
receiving additional evidence which might have the effect
of supplying the necessary proof which was lacking on the

|

former record. If the record is not changed in any sub-
stantial respect the law of the case as established on the
review would be held determinative. The expression of the
opinion of the reviewing court that on the facts in the
record the injury was shown to be compensable, or the direc-
tion that the application is remanded for further proceed-
ings and findings in accord with the opinion, would have
no special or greater effect.

It therefore becomes necessary to determine whether the
record as now presented contains the additional proof
necessary to sustain the commission’s finding and order
denying compensation.

The facts on the former record are stated in the opinion on’
the former review. (Nielsen v. Industrial Acc. Com., supra.)
The present order of the commission is based on the testimony
given by Dr. DuBray on the second hearing. Dr. DuBray
submitted evidence on the first hearing. Of that evidence
the District Court of Appeal in the former case stated at page
212: ‘‘Dr. DuBray, without any examination of the deceased
and without a full knowledge of the facts found at the
autopsy, gave his opinion that death was caused by coronary
occlusion and was not caused by the exertion of the em-
ployment.’? Dr. DuBray’s opinion given on the second
hearing was based on a written statement of the facts pre-
sented to him and on the other reports and the testimony
in the record. He was also subjected to a rigid cross-
examination. His conclusion was the same as on the first
hearing, viz., that death was not due to an acute dilatation
of the aorta which is produced by unusual exertion, but
was due to coronary occlusion not necessarily due to any
physical strain or exertion, but which in the present case
was due entirely to the pre-existing heart condition, and
that the decedent’s labors preceding his death did not con-
tribute to the condition which was the cause of death.

The applicants urge that the record on this, review is
not substantially different, and that the decision on the
former review (Nielsen v. Industrial Acc. Com., supra),
and the case of Winthrop v. Industrial Acc. Com., 213 Cal.
351 [2 Pac. (2d) 142], are controlling in support of their
contention that the injury is compensable.

In Nielsen v. Industrial Acc. Com., supra, the case of
Winthrop v. Industrial Aco. Com. 218 Cal. 351 [2 Pac.

2 es

(2d) 142], was followed to the effect that ‘‘there was no
true conflict in the evidence where that on one side con-
sisted of opinions based upon a state of facts not shown
by the record to exist while that on the other side was
based upon facts actually shown to exist or rested upon the
testimony of physicians who had actually treated and
examined the patient’. (Nielsen v. Industrial Acc. Com.,
supra, at p. 212.) No question arises with respect to the
holdings in those cases that aggravation of pre-existing
disease is) compensable. (See. 3 [4], Workmen’s Comp.
Act, Stats. 1917, chap. 586, as amended Stats. 1919, chap.
471; Knock v. Industrial Acc. Com., 200 Cal. 456 [253 Pac.
712].) The respondents assert that some misapprehension
is growing as to the meaning to be attributed to the fore-
going statement in the Winthrop case and in the Nielsen
case. It is stated that those decisions are mistakenly relied
upon as holding that experts whose opinion is based on a
hypothetical statement of the facts involved does not raise
a conflict with the testimony of those experts who have
examined the physical condition of the injured employee
and have acquired a personal knowledge of the facts. (See
Reynolds v. Struble, 128 Cal. App. 716, 729 [18 Pac. (2d)
690]; Thoreau v. Industrial Acc. Com., 120 Cal. App. 67,
71, 72 [7 Pae. (24) 767].)

By section 67 (¢) of the act (Stats, 1917, supra),
the findings and conclusions of the commission on questions
of fact are made conclusive and final and are not subject
to review. The power vested in the court on review by
subdivision 1 of the same section, to determine whether the
commission has acted without or in excess of its powers,
has not been construed to mean that the court may not
determine that the commission has exceeded its powers
when it has made a finding contrary to the evidence or in
the absence of any evidence to support it. (Pruitt v. Indus-
trial Acc. Com., 189 Cal. 459, 466 [209 Pac. 31]; Market
St. Ry. Co. v. Industrial Acc. Com., 193 Cal. 178, 182 [224
Pac. 95].) [Mf On the other hand the questions of the
weight of the evidence and the credibility of the witnesses
are for the commission and if there is any evidence or
reasonable inference which will support the commission’s
finding, the reviewing court has no power to disturb it.
There is no language in the Winthrop case, 213 Cal. 351, [2

(|:

Pac. (2d) 142]), which should afford any foundation for
a statement that the reviewing court had exceeded its powers
in that case. [J There was no intent to hold, and it was
not decided, that the opinion of experts who had no personal
knowledge of the facts may not raise a conflict with the
testimony and opinion of those whose conclusions are drawn
from a personal examination of the injured employee. The
opinion of experts based on hypothetical statements of the
facts in the record is competent evidence. The weight of
such evidence is for the commission’s determination. Nor
was it held in the Winthrop case that each statement or
question upon which an opinion is asked must contain all of
the facts appearing in the record. (Treadwell v. Nickel,
194 Cal. 243, 267 [228 Pac. 25].) What was held in the
‘Winthrop case was that the probative value of the witness’
opinion is lacking if in the’ course of its development he has
not been made acquainted with all of the essential facts.
This was the extent of the holding in that case and pur-
suant to the well-defined power of the court on review, is
the utmost that was intended by the holding. It must
also be noted here that the manner of presenting the facts
to the witness whose opinion is asked, or the form of his
answer or report based on such facts, is not a question
which greatly concerns us under pertinent Provisions of
the act. (Sec. 60 [a]. Stats. 1917, supra.)

The record now before us presents conflicting views as
to whether or not the exertion of the decedent an hour or so
prior to his death contributed to his disability. The views
on each side of this question are based on all of the facts
relating to the employee’s condition at the time of his death,
and on the history of the facts and circumstances leading up
to and attendant upon the last work that was done by him.
The record in this state gives the probative value to the
witness’ testimony which was lacking on the former hear-
ing and supports the commission’s present conclusion.
(Brandon v. Industrial Acc. Com., 211 Cal. 841, 343 [294
Pac. 1064]; MacDonald v. Industrial Acc. Com., 218 Cal.
156 [1 Pae. (24) 979].)

The order is affirmed. .

Thompson, J., Preston, J., Langdon, J., Curtis, J., and
Waste, C. J., concurred.

[L. A. No, 14380. In Bank—February 28, 1934.]

ALTON R. McBURNEY, Petitioner v. INDUSTRIAL
ACCIDENT COMMISSION, and CITY OF MON-
ROVIA, Respondents.

ee
eS

Herlihy & Herlihy, E. Herbert Herlihy and F. George
Herlihy for Petitioner.

Everett A. Corten, Everett W. Mattoon, County Counsel,
Fred M. Cross, Deputy County Counsel, and William Fleet
Palmer for Respondents,

THE COURT.—This is a proceeding to review an order
of the respondent commission denying compensation to the
petitioner.

In January, 1932, the petitioner applied to the bureau of
county welfare of the county of Los Angeles for assistance.
After due investigation he was found to be a resident of the
county and entitled to the relief sought. His requirements
were fixed at $41.60 per month. From that time until
April 11, 1933, he was given aid through the county welfare
department. That aid took various forms. He was given
groceries at irregular intervals from January 21, 1932, until
April 11, 1933. At numerous times he received contribu-
tions of cash or its equivalent in rent. Commencing on
January 26, 1932, also at irregular intervals, he was given
work orders, covering a working period of about forty-five
days, the last one being dated December 17, 1932. By
arrangement between the bureau of county welfare and other
public agencies in the county, men who received work orders
from the bureau were sent out to perform work for the
period indicated on the card, and usually under the joint
supervision of the representatives of the bureau and such
other public agencies. When the last work card was issued
to the petitioner he reported to a city foreman of the City
of Monrovia and was assigned to assist in clearing out a
drainage ditch in said city. The work performed on this
project is described as ‘‘made work’’, which is work pro-
vided in administering public relief and required as a con-
dition imposed upon able-bodied persons receiving aid.

While the petitioner was working on or near a truck
owned by the City of Monrovia and engaged in the same
project work, he sustained an injury to his foot and ankle.
The injury oceurred on December 28, 1932, and on January
9, 1933, the petitioner filed with the respondent commission

es

his application for an adjustment of his claim. After a full
and fair hearing the commission found that the petitioner
was injured ‘‘while oceupying the status of receiving aid
from the county welfare department of the county of Los
Angeles’’, and that he ‘‘was not an employee as defined by
law at the time of said injury’’, and ordered that the appli-
cant take nothing.

Two questions are presented. The first one is whether the
petitioner, at the time of the injury, was an employee as
contemplated by the Workmen’s Compensation Act. If he
was, the next question is: Was he an employee of the
County of Los Angeles or of the City of Monrovia, or both?
If he was not an employee, the second question need not be
answered.

Hl The problem of determining the status of a work-
man injured while engaged in public work as a condition of
his receiving aid from public funds set aside for such pur-
poses is of comparatively recent origin. It is a new one in
this court. The respondent commission has been called upon
in numerous eases to determine the question and has uni-
formly held that such a workman is not an employee as
defined by our workmen’s compensation laws. In at least
one case the District Court of Appeal has denied a petition
to review an order of the respondent commission in a similar
ease. (Van Devanter v. Industrial Acc. Com., [no opinion]
Civ. No. 8439, First App. Dist., Div. Two, March 21, 1932.)

Hi Workmen’s compensation laws were not known at
common law. They are of constitutional or statutory origin
and have been upheld generally on the theory that industry
should assume the liability of industrial injuries and death
as a part of the cost of production. More recently the same
liability has been extended to employment in other lines of
endeavor, including public contracts for labor and services
Hy In any case, the relationship of employer and employee
under a contract of employment is essential to recovery of
compensation. Section 7 of our Workmen’s Compensation
Act defines an employer as one ‘“‘who has any person in
service under any appointment or contract of hire... ex-
press or implied... 7’. Section 8(a) of the same act
defines the term employee as ‘‘Every person in the service of
an employer as defined by section 7 hereof under any ap-

|

pointment or contract for hire..., express or implied
”

Section 1 of the act of 1901 providing for the mainte-
nance and support of certain indigent persons resident of
the county (Stats. 1901, p. 636, as amended; see Deering’s
Gen. Laws, vol. 2, p. 3630, Act 5814) provides: “‘Every
county and every city and county shall relieve and support
all... indigent persons... lawfully resident therein.

. ”? Section 5 of the same act makes it the duty of the
board of supervisors, or of any person or society so author-
ized by the board, to investigate every application for relief
from the funds of the county; to supervise by periodic
visitation every person receiving such relief; to devise ways
and means of bringing such persons unable to maintain
themselves to self-support, and to keep full and complete
records of such investigation, references, relief and rehabili-
tation. Section 6 of the act provides that whenever any
person receiving relief under the act shall be or become the
owner of any property, real, personal or mixed, it is made
the duty of the district attorney to marshal such property
in the manner provided and to cause the same to be applied
on the support furnished by the county.

In compliance with the provisions of the foregoing act
the county of Los Angeles has raised large sums of money
by taxation for such relief. This money is kept in a sepa-
rate fund in the county treasury and is disbursed therefrom
on the order of the bureau of county welfare.

It may not be doubted that on the record presented
the petitioner made application for relief and the bureau
of county welfare granted the same in contemplation of and
pursuant to the act of 1901. During the time a person is
receiving relief under that statute he is in a sense a ward
of the county, in whose behalf the legislature has laid the
duty upon the county to provide relief, of course only to the
extent of its ability to do so. The petitioner had the right
to invoke the relief granted and under the circumstances
here shown the county could not deny it. The transaction
thus far is in the field of public welfare, and the essential
characteristics of a contract of hire are not present. Does
the fact that a person while receiving such aid is sent out
under work orders at a definite sum per hour or day there-
under supply such essentials? We are persuaded that it

2

does not, on the record here presented. The petitioner’s
ease was classified as an ‘‘open welfare case’, That meant
that he was entitled to relief and would be for some time to
come. He would receive the relief whether he worked or
not. The assistant director of relief projects testified that
the bureau of county welfare provides work under a num-
ber of classifications, or a number of circumstances; that
there were welfare cases when a doubt arose as to whether
an applicant for relief would work if he had a chance; that
im such a case a work test was prescribed for the man;
that for this work he might not be paid at all, or might be
paid a nominal sum, or he might be paid a substantial sum,
even the equivalent of a going wage; that during the period
of depression and wide-spread unemployment there were
many able-bodied men willing to work who would be entitled
to relief under the act of 1901, but who felt an abasement
in accepting it with idleness and therefore preferred while
receiving the relief to be engaged in some kind of activity;
that the plan evolved has proved its merit by experience and
is beneficial in two aspects; first, it demonstrates to the wel-
fare authorities the sincerity and good faith of the appli-
eant, or the opposite; and secondly, it relieves the recipient
of the odium of idleness while receiving aid from public
funds.

‘When the county supports an indigent man, the
county ‘‘is entitled to his services and earnings to aid in his
support’’. (48 Cor. Jur., p. 548.) If a contract for hire
existed the petitioner would be entitled to enforce payment
from the funds of the county of the reasonable value of the
services rendered. His status as here disclosed would not
lend support to such a cause of action; and we conclude
that a contract of hire did not exist between the county
and the petitioner at the time in question.

Recent decisions in other states involving the same or
analogous situations are to the same effect. (Bashman vy.
County Court, Kanawha County, [December, 1933] (W.
Va.) 171 S. E. 893; In re Moore, [October, 1933] (Ind.
App.) 187 N. E. 219; Vaivida v. City of Grand Rapids,
264. Mich. 204 [249 N. W. 826]; see, also, Thurston Chap-
ter., etc., vy. Department of Labor, 166 Wash. 488 [7 Pac.
(2d) 577]; Stiles v. Des Moines Council, Boy Scouts of
America, 209 Towa, 1235 [229 N, W. 841]; Dillon v. Trus-

ee 129

tees of St. Patrich’s Cathedral, 234 N. Y. 225 [137 N. EB.
311] ; Zoulalian v. New England Sanatorium & Benev. Assn.,
230 Mass. 102 [119 N. B. 686, L. R. A. 1918F, 185].)

Counsel for the petitioner has not cited any authority con-
trary to the recent decisions in West Virginia, Indiana and
Michigan, above referred to, which are directly in point,
and we have discovered none.

The order is affirmed.

|
[Sac, No, 4813, In Bank—February 23, 1934.]

M. B. CARPENTER, Executor, ete, Appellant, v.
LAFAYETTE J. SMALLPAGE et al., Respondents.

A. H. Carpenter, in pro. per., B., M. Bainbridge and
Frederick T, Felton for Appellant,

Ys EE 181

‘Lafayette J. Smallpage, in pro. per., and Chas. H. Epper-
son for Respondents.

CURTIS, J.—The original plaintiff died during the pen-
dency of this appeal. His executor has been substituted in
his place. All references herein to the plaintiff or appellant
are intended to relate to the original plaintiff.

Plaintiff brought this action to quiet his title to certain
real property situated in the city of Stockton. Defendants
answered, and the defendant M. M. McFarland set forth in
his answer that he was the owner of said real property and
claimed to have acquired the same under and through a
trust deed executed by Charles A. Menne and Alzada M.
Menne, his wife. Each of the parties hereto derive whatever
rights they have in said real property from a common source,
that is, from the said Charles A. Menne, who acquired the
property from George O. Rimington on June 9, 1923. In
October, 1925, Menne married Mary Alzada Welton. (In
all documents hereinafter mentioned her name appears as
Alzada M. Menne.) In April, 1926, he filed and recorded
a declaration claiming said real property as a homestead.
On May 29, 1926, Charles A. Menne deeded the property
to his wife, Alzada M. Menne. On June 14, 1926, Alzada
M. Menne was declared a bankrupt. As the real property
here involved was a homestead at the date said Alzada M.
Menne was declared a bankrupt, it is conceded that said
bankruptcy proceedings did not in any way affect the title
to said real property, although it stood on said date in the
name of said bankrupt. On July 7, 1926, Charles A. Menne
and his wife, Alzada M. Menne, executed a trust deed to
said real property to secure certain obligations due to the
Stockton Morris Plan Company. This trust deed was duly
recorded in the office of the county recorder of the county
of San Joaquin, where the real property therein described
was situated, on July 9, 1926. On January 23, 1930, an
abandonment of said homestead was executed and filed for
record in the office of said county recorder. On March 15,
1930, Charles A. Menne was adjudicated a bankrupt. On
February 6, 1932, Charles A. Menne and Alzada M. Menne
executed a deed to said real property to the plaintiff herein,
A. H. Carpenter, which deed was duly filed for record on
February 8, 1932. In the meantime, the trust deed executed

182 | i,

by Menne and wife to secure said obligations due the Stock-
ton Morris Plan Company had been foreclosed by a sale of
said real property by the trustees named therein and in ac-
cordance with the provisions of said deed of trust. At said
sale, the defendant M. M. McFarland became the purchaser of
said real property, and the deed from said trustees to said
McFarland was recorded on February 9, 1932. Upon this
state of the evidence, the trial court found that the defend-
ant M. M. McFarland was the owner of said real property
and that the plaintiff had no title or interest therein. Judg-
ment was rendered in accordance with these findings, and
the plaintiff has appealed. ,
HM There is no merit in the point made by appellant
that he was entitled to judgment on the pleadings. While
the plaintiff in his amended complaint set forth his claim
of title in regular form, the defendant M. M. McFarland by
his answer also set forth the chain of title under which he
claimed to be the owner of said real property. In this chain
of title was shown the trust deed executed by Menne and
wife to secure the obligations due the Stockton Morris Plan
Company, and all the proceedings taken to foreclose said
trust deed, down to and including the deed of the trustees
to McFarland by which they conveyed to McFarland said
real property in said foreclosure proceedings. | Appel-
lant contends that as McFarland did not place his deed of
record until after the appellant ‘‘had secured his record title
to said real property’’, and as there was no lis pendens filed
in the foreclosure proceedings, the appellant’s deed took
precedence over and was superior to the trustees’ deed to
McFarland. A mere statement of this contention shows its
lack of merit. McFarland’s title related back to the deed of
trust executed by Menne and wife to secure the obligations
of the Stockton Morris Plan Company which was recorded
on July 9, 1926, over five years before appellant received his
deed. Appellant, when he accepted delivery of his deed
from Menne and wife, had constructive, and the evidence
shows also actual notice of the trust deed executed by Menne
and wife some five or six years before such acceptance.
| | As to the absence of any lis pendens in the foreclosure
proceedings, the evidence shows that the trust deed was fore-
closed by a nonjudicial sale of the property by the trustees
after notice given as provided in said trust deed. There is

Ee 133

no place for a lis pendens in foreclosure proceedings of this
character.

Hl It is next contended that there is no evidence in the
record in support of findings ITI and IV of the court.
In finding III, the court found that plaintiff was not the
owner of said real property or of any interest therein. The
evidence conclusively shows that fact. Plaintift’s title to the
property was subject to the trust deed, and when this trust
deed was foreclosed it extinguished whatever interest plain-
tiff acquired under his deed from Menne and wife. Hi
Finding IV relates to the title of McFarland. In this find-
ing the court detailed the various conveyances through which
McFarland claimed title to the property beginning with the
deed from Rimington to Menne down to the trustees’ deed
to McFarland. Through these conveyances, McFarland ac-
quired a perfect title to the property, at least as against
the plaintiff. In this finding the court set forth the various
steps taken to foreclose the trust deed, all of which were
proven by the recitals in the trustees’ deed. These recitals
under the terms of the trust deed were made conclusive
proof of all facts therein recited against Menne and wife
and all persons claiming under them. (Roberts v. Colyear,
179 Cal. 669, 672 [180 Pac. 937].) There is no possible
question as to the sufficiency of the evidence to support
finding IV.

HM Plaintiff also claims that there was fraud practiced
against Menne and wife in the procuring from them of said
trust deed and also in the declaration of default thereunder
and in the further proceedings which culminated in the
foreclosure of said trust deed and the execution thereafter
of the deed to McFarland. Plaintiff attempted to introduce
evidence in support of these claims of fraud but, upon
objection by the defendants, the court refused to admit any
such evidence. The ruling of the court was correct, as
plaintiff failed to charge fraud in his complaint or in any
of his pleadings. (Burris v. Adams, 96 Cal. 664, 667, 668,
[31 Pac. 565]; Maison v. Pumtenney, 212 Cal. 184, 187
[298 Pac, 33].)

Hi The objection to the bill of exceptions is without
substance. The proceedings taken by the court in the settle-
ment of the bill of exceptions are fully set forth in the record
and show that the bill of exceptions was settled as directed

134 Le Ye

by the court and in accordance with the facts developed
before the trial court.

While in the statement of facts we have referred to
the two orders by which Menne and wife at separate times
were declared bankrupts, we do not see that either of these
orders, under the facts shown, had any effect upon the title
to said real property in so far as the rights of McFarland are
concerned. We simply set forth these orders to show all
the facts of the case. We find no error in the record.

The judgment is affirmed.

Preston, J., Langdon, J., Shenk, J., Seawell, J., Thompson,
J., and Waste, C. J., concurred.

[S. F, No, 14886, In Bank.—February 26, 1934.]

SADIE A. KENNEY, Appellant, v. WILLIAM J.
KENNEY, Respondent.

a es 185

J. BE. MeCurdy and F, E. Hoffman for Appellant.

A. Devoto for Respondent.

WASTE, C. J.—Plaintiff appeals from an interlocutory
decree of divorce, from an order denying her counsel fees
and costs on appeal and support money pending appeal, and
from. an order denying her motion for a new trial. [| The
latter order is nonappealable and the purported appeal there-
from must therefore be dismissed. The remaining two ap-
peals will be considered presently. .

The action was instituted by appellant to procure a divorce
on the ground of extreme cruelty. Respondent answered
and cross-complained. At the commencement of the trial it
was apparent to court and counsel that the parties had
reached a point where reconciliation was inconceivable and
that the important issue in the case, therefore, had to do
with a division of the property of the spouses. In view
of this, and following a discussion between court and coun-
sel, it was stipulated in open court that in consideration
of the withdrawal of respondent’s cross-complaint the appel-
lant would ‘‘forego the question of any more than a fair
or equal division ... of the community property’’. The
eross-complaint was thereupon withdrawn and the appellant
in a more or less perfunctory manner, and solely to satisfy
the requirements of section 130 of the Civil Code, offered
meager but corroborated proof tending to establish the alle-
gations of her complaint. With this matter out of the way,
the court then proceeded to hear evidence addressed to the
extent, kind and character of property owned by the parties.

136 Le |

The evidence on this issue is voluminous, highly contradictory
and in many respects confusing. Without attempting
to relate the evidence in detail, but referring to such por-
tions only as tend to support the trial court’s disposition of
this phase of the litigation, it appears that at the time the
parties married in 1919 the appellant was possessed of real
property approximating in value $2,000, while the respond-
ent husband owned property, real and personal, of approxi-
mately $8,000 in value. During the marital status some of
this property was improved, some disposed of, and other
property acquired. To attempt to trace any particular fund
or parcel would not only be difficult but a futile and uscless
task in view of the trial court’s finding that all property
owned by the spouses at the time of the commencement of
the action was community property. This finding is amply
supported by evidence tending to show an executed oral
agreement between the parties that all property owned by
them at the time of marriage and all property subsequently
acquired should be community property. Hi That such an
executed oral agreement serves to change the status of prop-
erty from that of separate to community is now well settled.
(Estate of Sill, 121 Cal. App. 202, 204, 205.[9 Pac. [2d]
243]; Estate of Wahlefeld, 105 Cal. App. 770, 775, 776
[288 Pac. 870]; Vieuw v. Vieux, 80 Cal. App. 222, 226, 227
[251 Pac. 640]; Martin v. Pritchard, 52 Cal. App. 720, 724
[199 Pac. 846].) In Estate of Sill, supra, it is stated:
“Without regard to the presumption found in section 164
of the Civil Code, it is well settled that the separate property
of either or both spouses may be transmuted into community
property and this may be done without the necessity of any
written agreement providing the agreement or understanding
to that effect is fully consummated.’’

In the instant case the respondent testified that the par-
ties had orally agreed, both before and after marriage, that
all property then owned by them or subsequently acquired
was to belong to them equally or, as respondent put it,
“‘ftty-fifty’’. That this agreement not only existed between
the spouses but was, in fact, consummated by them during
their marital.life, is established ard confirmed by their acts
and conduct during that period in their dealings and transac-
tions, appearing at length in the transcript, concerning the

a es 137

selling, purchasing, mortgaging and improving of said prop-
erties. -

HI The evidence being sufficient to establish the com-
munity character of the property involved, we now turn our
attention to the trial court’s division thereof, with a view
to determining whether it constitutes a ‘‘fair or equal divi-
sion’’ as contemplated in the stipulation above referred to.
In the main, the property of the spouses consists of five par-
eels of real property, four of which are lots situate in San
Mateo County and the fifth being a ranch situate in
Lake County. Three of the San Mateo County lots are im-
proved, two of them being income bearing and the third being
occupied by the appellant as her home. Appellant was
awarded the three improved San Mateo parcels and the re-
spondent was awarded the unimproved San Mateo lot and the
Lake County ranch. As is to be expected, the values placed
on these several parcels by the appraisers called by the par-
ties are at variance. Under well-settled principles we are
required, in the face of such conflict, to accept that portion
of the evidence as to value which tends to support the trial
court’s division of the several parcels. With this in mind,
we accept for present purposes the values fixed by respond-
ent’s appraisers, from which it is apparent that the tliree
parcels awarded to the appellant are respectively valued at
$4,500, $3,750 and $3,525, aggregating $11,775, while the two
parcels awarded to the respondent are respectively appraised
at $10,000 and $1500, totaling $11,500.

Appellant urges, however, that while these figures tend to
indicate that she has been awarded in excess of one-half of
the common property, the existence of encumbrances on two
of the parcels awarded to her serves to reduce her share
thereof below one-half of the aggregate value. In this con-
nection it is important to bear in mind that the court below
has awarded appellant all of the rent-bearing properties,
In addition, the trial court had in mind that appellant
throughout the existence of the marriage, as disclosed by the
evidence, -handled and banked practically the entire income
of the parties, including the earnings of both spouses and the
rentals from the properties. It further appears in the evi-
dence that appellant had banked much of this income in her
name alone and had consistently failed and neglected to ap-

138 Le 7

prise respondent of the status of such account or accounts.
Moreover, appellant upon the trial of the cause failed and
neglected to produce her bank statements disclosing the con-
dition of such account or accounts, though she was repeatedly
requested so to do and repeatedly promised so to do. With
these matters before it we are not prepared to say that the
court below made an unequal or unfair division of the com-
munity property of the spouses.

This brings us to a consideration of the propriety
of the order of the lower court denying appellant’s motion
for costs and counsel fees on appeal and support money
pending appeal. Such a motion is, of course, addressed to
the sound discretion of the trial court and, in the absence
of a clear showing of abuse in the exercise thereof, its de-
termination will not be disturbed on appeal. (Mudd v.
Mudd, 98 Cal. 320, 322 [88 Pac, 114]; Gay v. Gay, 146 Cal.
237, 240 [79 Pac. 885].) In view of the fact that the court
below prior to trial allowed the appellant costs and counsel
fees in an amount of $85 and support money pending trial
in an amount of $50 a month; in view of the further fact,
already referred to, that appellant under the interlocutory
deeree has been awarded the rental-bearing properties; and
in view of appellant’s consistent failure to disclose the con-
dition of bank accounts standing in her name alone and
containing community funds, we cannot say that the lower
court abused its discretion in denying the motion for costs
and counsel fees on appeal and support money pending
appeal.

In conclusion it should be noted that appellant makes
the point that the court below failed to find on the issue of
residence. In this appellant is technically correct. The
omission is readily explainable. At the commencement of
the trial, as already related, court and counsel in effect
agreed that a divorce was essential and that the sole and
important issue in the ease concerned a division of the
properties. Because of this, the evidence tending to estab-
lish the ground of divorce was, as stated above, meager,
though sufficient, while that addressed to the property rights
was voluminous. Under the circumstances, the trial court’s
findings concern themselves, in the main, with such property
rights. However, the complaint contains the necessary alle-

; PC 139

gation of residence and a reading of the record discloses it
was established by the testimony of appellant and her cor-
roborating witness. Therefore, in order to satisfy the statu-
tory residence requirement, and under the authority conferred
on appellate courts by section 956a of the Code of Civil Pro-
cedure, the findings of the trial court are hereby modified
and amended by adding thereto the following finding: ‘‘That
all of the allegations of paragraph I of the plaintiff’s com-
plaint are, and each is, true.’? That an appellate court may
make additional findings in order to affirm a judgment is
now settled. (Tupman vy. Haberkern, 208 Cal. 256, 266
[280 Pac. 970].)

What we have said amply disposes of the several appeals
herein.

The appeal from the order denying a new trial is dis-
missed and the appeals from the interlocutory deeree of
divorce and from the order denying costs and counsel fees
on appeal-and support money pending appeal are, and each
is, affirmed.

Curtis, J., Shenk, J., Preston, J., Thompson, J., Seawell, .
J., and Langdon, J., concurred.

Rehearing denied.

[Sac No, 4777. In Bank.—February 27, 1984.]

M. B. WOOD, Respondent, v. E. K. NELSON et al., De-
fendants; GEORGE COVELL, Appellant.

14 De

0 7
ee

Edwin V. McKenzie, Arthur J. Carlson and Frank J.
Mahoney for Appellant.

Thomas Butler for Respondent.

SHENK, J.—This is an appeal, from a judgment for the
plaintiff in an action to foreclose a mechanic’s lien.

The claim grew out of the construction of the Covell Hotel
in Modesto. The plaintiff was employed by the general con-
tractor to furnish the labor and materials to complete the
mason work on the structure. The building was completed
and accepted. No question is raised as to the due filing of
the claim of lien.

The plaintiff based his right to recover upon a written
contract between him and the defendant, Nelson, the general
contractor, calling for a contract price of $7,000, and upon
an oral modification of the written contract pursuant to
which he alleged sums due aggregating $3,951.25. Payment
on the foregoing sums to the extent of $7,964.82 was also
alleged. The balance of $2,986.48, together with a filing fee
of $1.80, was claimed to be due, owing and unpaid and to be
a lien on the real property involved.

The trial court found the existence of the written con-
tract. It also found that when the work had progressed to a
certain point, the plaintiff and the defendant Nelson entered
into an oral agreement for a modification of the written con-

— a ut

tract; that the modification agreement called for changes in
the thickness of the walls and the materials to be used, and
for changes in the method of fireproofing and reinforcing,
and provided for payment to the plaintiff, in addition to
the contract price, of the reasonable value of additional mate-
rials used and labor performed, plus ten per cent thereof for
superintending the work. The plaintiff had judgment for
the amount alleged to be due. The judgment provides for a
sale of the premises and if the proceeds be insufficient to
satisfy the claim for judgment against the defendants, E. K.
Nelson, the general contractor, George Covell, the owner, and
Southern Surety Company of New York, the surety on the
contractor’s bond. The defendant, George Covell, alone ap-
pealed from the judgment.

HI The main contention on the appeal is that the evi-
dence does not warrant the finding that there was a modifi-
cation of the original agreement providing for a contract
price of $7,000. It is the appellant’s contention that the
changes referred to by the plaintiff were contemplated in the
negotiations preceding the execution of the written contract.
There was testimony of what were the conversations between
the plaintiff and the general contractor prior to the execu-
tion of the written contract, and to the effect that certain
requirements were to be changed or omitted. The appellant
contends that inasmuch as the plaintiff nevertheless entered
into the written contract to be bound by the general plans
and specifications, such conversations cannot constitute evi-
dence of any modification of the written contract. It is
further contended that any materials or labor furnished in
addition to what was called for by the written contract were
extras furnished without the required written order of the
owner and architect. There was also testimony of conversa-
tions had between the plaintiff and the general contractor
subsequent to the commencement of the work relating to cer-
tain necessary changes. On the whole record we cannot say
that the finding of the court is without support in the evi-
dence. Whether the conversations between the parties to the
contract, taken as a whole, amounted to no more than an
agreement to furnish extras, or resulted in an agreement of
modification of the written contract, and what that modifica-
tion agreement was, were primarily questions of fact for the
court, and on the record presented the conclusion reached by

2 es

it cannot be disturbed; nor can it be said that the amount
remaining unpaid is not as found and decreed by the court.

HI The only other question is whether the plaintiff was
entitled to a personal judgment against the appellant for any
deficiency. The court found that the contract with Nelson,
the general contractor, and the contractor’s bond were duly
filed for record. In the complaint it was alleged that the
plaintiff caused a stop notice to be served upon the owner
at a time when $10,500 of the contract price was due and
payable to the general contractor. The defendant Covell, by
his answer, admitted the service of the stop notice, and ad-
mitted the retention of $12,500 of the contract price which he
offered to deposit in court. The court found the fact of
service of the stop notice and that at the time of trial there
was due to the defendant Nelson from the owner the sum of
$10,500 of the contract price, which the defendant- Covell
then held and retained. The judgment for any deficiency
against the appellant is based upon this finding and is to be
construed as being addressed to and limited by the amount
of the fund retained by him, and is a proper judgment
against the appellant to that extent. (Builders’ Supply
Depot v. O’Connor, 150 Cal. 265 [88 Pac. 982, 119 Am. St.
Rep. 193, 11 Ann. Cas. 712, 17 L. BR. A. (N. S.) 909]; see
Roberts vy. Security T. & S. Bank, 196 Cal. 557, 578, 574
[288 Pace. 673]; 17 Cal. Jur., p. 48 et seq.)

The judgment is affirmed.

Seawell, J., Thompson, J., Curtis, J., Preston, J. and
Waste, C. J., concurred.

[L. A. No. 14262. In Bank——IFebruary 27, 1934.]

RAE MacARTHUR, Petitioner, v. INDUSTRIAL ACCI-
DENT COMMISSION et al. Respondents,

143

J. D. Bauer for Petitioner,

Arthur I. Townsend, Everett A. Corten, Redman, Alex-
ander & Bacon and R. P. Wisecarver for Respondents.

SHENK, J.—Petition for review and annulment of the
order of the respondent commission which denied any com-
pensation to the petitioner.

i

The petitioncr claims compensation as a dependent widow
of Glenn MacArthur, who met his death on April 1, 1932,
at Wilmington, California, from injuries sustained while
he was employed as a loftman by the respondent Raymond
Conerete Pile Company. The respondent Employers’ Lia-
bility Assurance Corporation, Ltd., was the employer’s in-
surance carrier. The only issue in the case was whether
the applicant was the widow of the deceased employee and
entitled to compensation as a dependent.

The respondent commission made its finding that the de-
ceased employee left no person dependent upon him for sup-
port, and denied any award to the applicant. The question
for review is whether the commission has exceeded its powers
in so finding on the record presented.

The applicant testified on the hearing before the com-
mission that she was the wife of the decedent by a marriage
which took place in Vancouver, B. C., on October 4, 1921,
pursuant to an unwitnessed oral agreement between them.
No marriage license was obtained nor any ceremony per-
formed. The parties lived as husband and wife for about
a year in British Columbia and then came to the United
States. They lived at Seattle, San Francisco and Oakland,
where they mingled with friends and relatives and held
themselves out as husband and wife. They finally went to
live in Wilmington, where the decedent’s mother resided
and where they were received, and continued to live, as
husband and wife up to the time of the employee’s death.
During this time, a period of about eleven years, the dece-
dent supported himself and the applicant from his earnings.
The record shows without dispute that the applicant was
maintained as a member of the decedent’s household and
was dependent upon him for support. The question is
whether she was such a dependent as is entitled to receive
compensation pursuant to the provisions of the Workmen’s
Compensation Act.

The answer must be found in section 14 of the act.
(Stats. 1917, chap. 586, as amended Stats. 1919, chap. 471.)
Section 14a (1) provides that a wife living with her hus-
band at the time of the injury or for whose support he
was legally liable at that:time shall be conclusively pre-
sumed to be wholly dependent upon him for support. See-
tions 14 (b) and (c) provide: ‘‘(b) In all other cases,

Ur
questions of entire or partial dependency and questions as
to who constitute dependents and the extent of their de-
pendency shall be determined in accordance with the fact,
as the fact may be at the time of the injury of the em-
ployee. (c¢) No person shall be considered a dependent of
any deceased employee unless in good faith a member of the
family or household of such employee, or unless such per-
son bears to such employee the relation of husband or
wife...”

In Temescal Rock Co. v. Industrial Ace. Com., 180 Cal.
637 [182 Pac. 447, 13 A. L. R. 683], where an award to the
applicant was upheld, it was decided that a woman who in
good faith believed that she was the lawfully wedded wife
of the decedent was entitled to compensation as a dependent
pursuant to subsection (b) as qualified by subsection (c).
But the requirement of good faith to achieve this result
depends upon some basis in fact upon which the woman
was entitled to found her belief. In that case the contract-
ing parties were ignorant Mexicans who obtained a license
to marry and thereafter cohabited as husband and wife
under the belief that they had been legally married.

Prior to the events in the present case hereinbefore re-
lated, the petitioner, in June, 1914, in British Columbia,
was married by a minister to a man by the name of Meehan,
after a license had been obtained. Subsequently she ob-
tained a divorce in Tombstone, Arizona, from Meehan on
grounds other than adultery. She returned to Canada,
where presumably she met the decedent. At the time the
petitioner and MacArthur were contemplating marriage
they were informed by friends that they probably could
not obtain a license because the law of Canada would not
recognize a divorce on any ground except adultery and
that such a marriage would therefore be bigamous. The
petitioner and MacArthur were acquainted with another
couple who had consummated their intention by living
together as husband and wife without solemnization of the
marriage ceremony. The petitioner and MacArthur then
made the oral agreement referred to and from that time,
October, 1921, lived together as husband and wife. The
petitioner stated upon the hearing that at all times she
honestly believed that she was lawfully living with the dece-

TO

dent as his wife and that they had contracted a valid com-
mon-law marriage.

As pointed out in the ease of Temescal Rock Co. v. Indus-
trial Acc. Com., supra, in not every case wherein the
applicant has entered into the marital relationship with the
decedent without complying with the requirements of the
law (see. 68 et seq., Civ. Code) will the test as to whether
she is a dependent pursuant to the act apply in her favor.
The essential element in each case is the good faith of the
parties, which must be evidenced by a reasonable basis for
the belief that they had complied with the laws of the
country in which they assumed the relationship. In two
cases since that decision, where the facts showed that the
parties believed that they had solemnized a legal and bind-
ing marriage, the test necessary to determine the good faith
of the parties was held to have been met. (Louden v.
Industrial Acc. Com., 105 Cal. App. 65 [286 Pac. 1045];
Landsrath v. Industrial Acc. Com., 77 Cal. App. 509 [247
Pae. 227].)

In Laylor v. Industrial Acc. Com. 181 Cal. App. 468
[21 Pac. (2d) 619], the court refused to annul an order
of the commission denying compensation to the applicant
based on a finding that she was not in good faith a member
of the decedent’s household. The court refused to extend
the case of Temescal Rock Co. v. Industrial Acc. Com.,
supra, to facts which established that in California the
applicant and decedent commenced living together; that
when marriage was discussed, the decedent said they were
just as good as married, ‘‘it is a state law’; and that
she believed him and lived with him as his wife and they
were considered as married by their friends and acquain-
tances. The showing on the present record is ruled by the
statement in that case that if there is any evidence in the
record to support the inferences drawn by the commission
and upon which it has based its findings, those findings
cannot be disturbed. [J The commission, on the evidence
presented here, could reasonably find that the applicant
did not believe that she could contract a legal and binding
marriage in Canada at the time she agreed to live with the
decedent as his wife. The conclusion that the petitioner is
not entitled to an award pursuant to the provisions of sub-

Ss

sections (b) and (¢) of section 14 of the act is therefore
supported by the record.

The commission, however, concedes that if the law of
Canada at that time permitted marriage per verba de prac-
senti, followed by cohabitation, the applicant would be en-
titled to compensation under subdivision (a) 1 of section
14. (Civ. Code, sec. 63.) The evidence in the record as
to what was the law of Canada at the time in question was
submitted in a supplemental return to the writ of review.
Evidence on this issue was not before the commission at the
time it made its order herein, but was submitted upon a
petition for rehearing before the commission, which was
denied. The respondent commission requests that the sup-
plemental record be reviewed on the present proceeding in
this court in order to expedite a final disposition of the
matter. Inasmuch as all parties appear to have acquiesced
in the request by submitting a showing as to the law of
Canada on the point involved, the question will be con-
sidered. .

The evidence before us on this issue shows the following
with reference to the state of the law of British Columbia
in 1921. The Marriage Act in force at that.time was R. 8.
B. C. 1911, chapter 151. Section 25 of that act provided:
“In all matters relating to the mode of celebrating mar-
riages or the validity thereof, and the qualifications of parties
about to marry, and the consent of guardians and parents
or any person whose consent is necessary to the validity of
such marriage, the law of England shall prevail, subject
always to the provisions of this act.’? The act extended
the authority to perform the marriage ceremony to Protes-
tant and other clergymen and to civil authorities, in addi-
tion to clergymen of the established church of England. The
act does not specifically invalidate a marriage per verba de
praesenti. By the operation of section 25, therefore, it
would appear that whether such a marriage was valid in
British Columbia will depend on the answer to the question
whether under the law of England a marriage per verba de
praesenti followed by cohabitation was recognized as valid.

In volume 19, American and English Encyclopedia of
Law, at page 1192, it is stated: ‘‘It is now settled that
there could be no valid marriage at comiaon law in England

os

without the presence of a person in holy orders, that is, a
clergyman of the established church.’’ To support this
statement are cited Regina v. Millis, 10 Cl. & F. 534; Beamish
v. Beamish, 9 H. L, Cas. 274; Catherwood v. Caslon, 138 M. &
W. 261; Culling v. Culling (1896), Prob» 116. Informal
marriages were considered valid under the common law of
England prior to 1753. (19 Am. & Eng. Ency. of Law,
pp. 1193, 1194.) In that year Lord Hardwicke’s Act (26
Geo. II, chap. 33), regulated the license and solemnization
of marriage in England. The case of Regina v. Millis,
supra, 1843, reflects the spirited controversy which arose
on the question whether under that act an informal mar-
riage was valid. The question was determined adversely
to its validity by the lower court and the result was left
undisturbed on appeal by reason of an equally divided
House of Lords. In a note discussing the case the same
authority (19 Am, & Eng. Ency. of Law, p. 1194), states:
“The decision in this case has not been universally acquiesced
in, and there has been a reluctance to follow it except on
the principle stare decisis. (Catterall v. Catterall, 1 Rob.
Bee. 580, 11 Jur. 914, per Dr. Lushington; Atty.-Gen. v.
Windsor, 6 Jur. N. 8. 834, per Lord Campbell.) See also
remark of Willes, J., in Reg. v. Mainwaring, 7 Cox. 0. C.
196, and the opinion of the same judge in Beamish v.
Beamish, 9 H. tu. Cas, 274... . The courts of Canada have
disapproved or refused to be bound by Reg. v. Millis. (Doe
v. Breakey, 2 U. C. Q. B. 349; Connolly v. Woolrich, 11
L. 0. Jur. 197.)””

The Marriage Act of 1823 (4 Geo. IV, chap. 76) repealed
and superseded Lord Hardwicke’s Act. This act and the
Marriage Act of 1836 (6 and 7 Will. 4, chap. 85), rendered
void a marriage not solemnized in accordance with their
requirements. (16 Halsbury’s Laws of England, p. 280,
par. 516.) The record before us shows no change in the
condition of the law of England at the time of the enact-
ment of R. 8. B. C. 1911, supra.

The petitioner is forced to concede that despite the criti-
eisms of the decision in Regina v. Millis, that case estab-
lished the law of England from the date of its decision,
that is, that there must be a compliance with the marriage
act in force. The petitioner contends, however, that the
principle of that case was not adopted or recognized as part

a

of the common law of Canada. Counsel for the petitioner
states: ‘When Canada was colonized, long prior to the deci-
sion of the Millis case, Canada took the common law as then
recognized in England, and at that time the doctrine of the
Dalrymple case (Dalrymple v. Dalrymple, 1811, 2 Hagg.
Conn. Rep. 54), was fully established as the common law of
England, and of necessity became the common law of
Canada, and the Dalrymple case establishes the rule of the
validity of common law marriages.’’ Counsel relies on
Breakey v. Breakey, 2 U. C. Q. B. 349; Connolly v. Wool-
rich, 11 L. C. Jurist 197, and 5 Law Quarterly Review, 57.
He presents no case interpreting the statute of 1911 or
determining what was the law applicable under section 25
of that act, whether the law of England as herein noted,
or the common law adopted by other Canadian provinces.
On the contrary he states that no case involving an attack
upon such a marriage or deciding the validity thereof under
the act of 1911 appears to have arisen. Nor is it shown
what was the statutory law of other provinces alleged to
have rejected the law of England following the case of
Regina y. Millis.

The case of Breakey v. Breakey, supra, relied upon, in-
volved the validity of a marriage which was solemnized
publicly in Ireland about 1815 before a Presbyterian minis-
ter, who had either been removed or had resigned from his
congregation, although he still continued to perform mar-
riage ceremonies. The parties lived together in Ireland
and England, and afterward emigrated to Canada. The
decision in that case that the marriage was valid rested
upon the conclusion that such marriages were legalized by
the Imperial Statute 5 and 6 Vict., chapter 113, Although
the cases of Regina v. Millis and Dalrymple v. Dalrymple,
supra, were discussed, no conclusion as to the applicability
of those cases was reached, inasmuch as it was thought that
the Imperial Statute was determinative of the issue. We
may assume that had a case involving similar facts arisen
for decision in British Columbia the marriage would like-
wise have been held valid.

The case of Connolly v. Woolrich, supra, decided in 1867
by the superior court, District of Montreal, involved a mar-
riage solemnized in 1803 in the Athabaska district of Canada
in accordance with Indian tribal customs, between William

150 ee

Connolly and a daughter of an Indian chief of the Cree
nation. They lived together as husband and wife until
1832 in the Northwest country, in Lower Canada and Mont-
real, and had numerous children. The woman during that
time was known as Mrs. Connolly. In 1832, while the
parties with their family were in Montreal, a marriage by
Connolly with a second cousin, Julia Woolrich, was solem-
nized according to law, and two children were born of
that union, which lasted until 1849, when Connolly died.
In that case it was concluded that the Athabaska region
was beyond and without the chartered limits of the Hudson
Bay Company. The opinion was also ventured, admitting
that the region was within the chartered limits, that the
charter applied only to those ‘‘who belonged to the com-
pany, or were living under them’’, and that Connolly was
not a member of or living under the Hudson Bay Company.
It was concluded that there was nothing which changed or
abolished the customs of the Indians or the laws of the
French settlers, or which introduced the English common
law into that region; that the lex loci governed and the
marriage was valid. The court indicated that if it were
compelled to decide the case under the English common law
it would not hold itself bound by the case of Regina v.
Millis, but would regard the marriage as valid. In this
respect it was noted that the region of Athabaska was
barbarous country situated in the remote wilderness of
northwestern America where there were no priests or minis-
ters, and that even the law.of England does not compel
parties to do the impossible.

The Dalrymple case relied upon by the petitioner affirmed
a marriage per verba de praesenti made in Scotland, where
at that time so-called common-law marriages were valid.
The cases submitted and herein cited recognize that the laws
of England had no force beyond its boundaries. They were
in force in America in the states and in the provinces when
especially adopted as the law thereof, or when it could be
said that they were brought there by the settlers, The court
in the case of Connolly v. Woolrich, supra, noted that
several of the states had recognized that a marriage without
the intervention of a clergyman was a good marriage pur-
suant to the common law of England which the settlers
there carried with them. What was decided later on in

ae

Regina v. Millis never became the law except by legislative
enactment.

The citation by the petitioner of 5 Law Quarterly Review,
page 57, adds nothing helpful to the foregoing discussion.

The burden of proving the affirmative of the issue

is upon the petitioner. (Sec. 19 (4), Workmen’s Compen-
sation Act, supra.) We may assume that under the statute
of 1911 in force in British Columbia in 1921, without for
the moment considering the effect of section 25 thereof, the
courts of that province would adopt the common law claimed
by the petitioner to be in force elsewhere in Canada. The
petitioner also, however, shows that no case interpreting the
statute as affected by section 25 thereof, or any similar stat-
ute, has been decided. The record before us cannot be said
to support an interpretation of the statute contrary to its
express provisions, viz., that with respect to the mode of
celebrating marriages or the validity thereof the law of
England shall prevail where not otherwise modified by the
act. On the showing made it follows that a marriage which
was not celebrated in accordance with the provisions of the
act of 1911 and the law of England as shown by the record
was invalid. This result is also in conformity with the law
of California on the subject. Therefore, in the absence of
any law in this state which would recognize the validity
of such a marriage, and lacking any facts of remoteness
from civilization which would support a showing of im-
possibility to comply with the statutory requirements en-
acted for British Columbia, we must conclude that the
alleged marriage of the petitioner and MacArthur was
invalid.

The foregoing answers all of the contentions required to
be determined.

The order is affirmed.

Seawell, J., Thompson, J., Curtis, J., Preston, J., Langdon,
J., and Waste, ©. J., concurred.

1 ee

[Sac, No. 4622, In Bank—February 27, 1934.]

ORIGINAL MINING AND MILLING COMPANY (a Cor-
poration), Respondent, v. SAN JOAQUIN LIGHT
AND POWER CORPORATION (a Corporation), Ap-
pellant.

Thos. J. Straub, W. R. Dunn and F. H. Pearson for Ap-
pellant.

Conley, Conley & Conley, W. M. Conley, Philip Conley
and Matthew Conley for Respondent.

THE COURT.—Plaintiff is a corporation organized under
the laws of this state. It is the owner of the Clearing House
Mine situated in Mariposa County some considerable distance
from the city of Merced, where the principal place of busi-
ness of the company is located. Since its organization in
1911 until his death in 1926 J. B. Hart was its secretary
and treasurer. Hart was also cashier of the Farmers and
Merchants National Bank of Merced. Hart resided in
Merced, where the principal place of business of the bank
was located and where he carried on his duties as an officer
of the two corporations. At the times herein mentioned up
to the time of his death, Hart’s reputation for honesty and
integrity was of the very highest. He undoubtedly had the
implicit confidence of his business associates, including the
members of the board of directors of the plaintiff mining
company. He was given much broader powers than those

usually appertaining to the two offices held by him in the
mining company. In fact, the president of the company
testified that Hart had entire charge of the business affairs
of the mining company. The defendant was engaged in the
business of manufacturing, distributing and selling elec-
tricity to be used for light and power purposes. Its prin-
cipal place of business had been Los Angeles, but some time
in the year 1925 it was removed to Fresno, California, about
fifty miles south of the city of Merced. The representative
of the defendant power company in the city of Merced was
R. Casad, who held the title of district manager. His dis-
trict covered practically all the county of Merced and a
portion of Mariposa County. He and Hart were lifelong
friends. His duties were those usually performed by a dis-
trict manager of a light and power company, and included
the solicitation of business for his employer, the collection
of the bills of the consumers, and he also solicited on behalf
of his company the sale of prior preferred stock issued by
his company under authority of the railroad commission of
the state. Casad approached the officers of the mining
company, Mr. Kocher, its president, and Mr. Hart, its secre-
tary and treasurer, regarding the supplying of electricity
to operate the mining operations of the plaintiff company,
and as a result of his efforts a written agreement was entered
into by the plaintiff mining company and the defendant
power company, on August 27, 1921, whereby the latter
company agreed to extend its power line to the Clearing
House Mine and to furnish the mining company with electric
energy to operate said mine. It was estimated that the cost
of making this extension would be in the neighborhood of
$40,000. The mining company in this agreement was to pay
to the power company $13,200 in cash, and was also to pur-
chase from the power company on or before September 1,
1921, 274 shares of its prior preferred stock at $98.50 per
share, amounting in the aggregate to the sum of $26,989.
One of the terms of this agreement was that the mining
company should not sell or dispose of this stock for five
years from that date. This agreement was executed by
Mr. Kocher, as president, and Mr. Hart, as the secretary of
the mining company, and by Mr. Wishon, the general man-
ager, and Mr. Durfey, the assistant secretary of the power
eompany. Another written agreement was entered into at

156

the same time between the same parties, whereby the power
company agreed to furnish and the mining company agreed
to pay for electrical energy to operate the mining machinery
at the mine of the plaintiff. This agreement was executed
by Kocher and Hart, as officers of the mining company, and
by M. E. Newlin, manager of the commercial department of
the power company. A third written agreement was also
entered into between the same parties, dated August 31,
1921, whereby the mining company agreed to dig all holes
‘for the poles to be used in the construction of the power
line which the power company had agreed to extend to the
mine of plaintiff, and the power company agreed to pay the
mining company a certain sum of money for said service.
This agreement was executed by R. Casad on behalf of the
power company and by J. B. Hart on behalf of the mining
company. A day or two after this agreement of August 27,
-1921, was executed, Hart came to Casad and said that the
mining company did not have the money to buy the 274
shares of stock from the power company, and asked Casad
to have the stock issued in his [Casad’s] name and then to
borrow from Geo. H. Bloss $17,000, giving the stock as
security, and he as treasurer of the mining company would
put up the balance needed to pay for the stock in full. At
first Casad objected to this proposal, and stated that he did
not wish to use his credit on behalf of the mining company.
Hart assured him that it would be all right as he, Hart,
had full authority from the mining company to handle the
purchase of said stock. Casad then agreed to the plan. He
signed a stock purchaser’s agreement for the 274 shares, and
forwarded the same to the power company. In the mean-
time, he had talked with Mr, Alexander, stock sales manager
of the power company, regarding the stock being issued in
his [Casad’s] name, and Alexander assented to the plan.
Casad then contacted Bloss, and the latter agreed to loan
him $17,000 on 200 shares of the stock for one year at seven
per cent interest. The note for $17,000 was drawn up by
Hart at his office in the bank, and Casad and Bloss went
to the bank, where Casad executed the note and Bloss gave
him his check for $17,000. The stock a few days later was
sent to Hart, and two of the certificates for 100 shares each
were delivered to Bloss as security for the $17,000 note.
The other certificate for 74 shares was left with Hart.

es | 57

The $17,000 received on Bloss’s check was deposited by
Casad to his credit in the bank. Hart from the funds of the
mining company deposited $9,989 to Casad’s credit, who then
drew his check for $26,989 in favor of the power company
and sent the same to the company in payment of said stock.
At the time Hart suggested to Casad that he borrow this
money from Bloss, he stated to Casad that he did not want
anybody to know that the mining company was borrowing
money and requested Casad not to mention the matter to
anybody. This request was assented to by Casad, and he
did not mention the matter of the loan to any other persons,
not even to the directors of the mining company. We must
except from this statement the conversation between Casad
and Alexander mentioned above. The mining company paid
to the power company the cash payment of $13,200 provided
for in the contract of August 27, 1921. In the latter part
of the following June, Hart requested Casad to ascertain
from the power company whether it would buy back the
stock. Casad did so, and the company agreed to buy back
the stock at $95 per share. Thereupon and under the direc-
tion of Hart the stock was transferred to the company at
that price. Casad paid off the loan to Bloss, and the bal-
ance of the money received from the sale, amounting to
$8,837.75, together with a small amount advanced by Hart,
was paid by Casad to Hart, the treasurer of the mining
company. The exact amount of this payment was $9,030.
Nothing further was heard of this matter until after the
death of Hart, which occurred in September, 1926. Just
prior to his death a federal bank examiner had ordered the
Farmers and Merchants National Bank, of which Hart was
cashier, to suspend business for the reason that it was found
that Hart had embezzled the funds of the bank. Upon hear-
ing of said order Hart committed suicide. It was found
upon an investigation of his affairs that he had embezzled
funds belonging to the plaintiff mining company and to
other persons, as well as the funds of the bank. The papers
and records of the Original Mining and Milling Company,
which up to that time had been in the possession of Hart,
were turned over to the directors of said company. The
entire transaction regarding the purchase and resale of said
274. shares of stock was then brought to light, with the result
that the mining company brought this action against the

1 ee

power company to compel the power company to issue-to the
plaintiff 274 shares of the prior preferred shares of stock
of the defendant corporation as of the date of September 1,
1921, together with all dividends accruing thereon from said
date; or pay and return to the plaintiff the sum of $26,989,
with interest; or for damages in the sum of $42,011. The
action was tried by the court with a jury and a verdict was
rendered in plaintiff’s favor in the amount of $42,011, from
which the defendant has perfected an appeal upon a bill of
exceptions.

In plaintiff’s complaint are set forth the facts attending
the purchase of said 274 shares of stock of the defendant
company, followed by an allegation: ‘‘That after the pay-
ment to said defendant of said sum of $26,989, in payment
for said shares of stock, the said J. B. Hart, as such scere-
tary and treasurer of plaintiff, without the knowledge or
consent of plaintiff, and in order to cheat and defraud plain-
tiff, fraudulently conspired with defendant, and the said
defendant and said J. B. Hart fraudulently devised and con- ~
irived a plan whereby plaintiff should be cheated and de-
frauded of the said sum of $26,989 so paid for said shares
of stock, and should be cheated and defrauded of said
shares of stock. In pursuance of said conspiracy so entered
into by said defendant and said J. B. Hart, and in order
to carry out the fraudulent plan and scheme devised by
said Hart and said defendant, it was arranged that when
said shares of stock were issued, the same should be issued
not in the name of the plaintiff but in the name of said
R. Casad, and that said shares of stock should not be de-
livered to the plaintiff, but should be delivered to the said
R. Casad. That thereafter, pursuant to said conspiracy and
pursuant to said plan and scheme so devised by said defend-
ant and said J. B. Hart for the purpose of so cheating
and defrauding plaintiff, the said shares of stock, to-wit,
274 shares of the prior preferred stock of said San Joaquin
Light and Power Corporation, were issued by said defend-
ant in the name of said R. Casad, and were thereafter
delivered to said R. Casad. That said San Joaquin Light
and Power Corporation has at no time since making and
entering into said agreement in writing with plaintiff, a
copy of which is hereunto annexed and marked ‘Exhibit A’,
issued or delivered to the plaintiff herein said 274 shares

ES 3°:

of its prior preferred stock, or any shares thereof, or any
other shares of stock whatsoever; nor has said San Joaquin
Light and Power Corporation at any time returned or
repaid to plaintiff the said sum of $26,989, or any part
thereof, so paid by it, as the purchase price of said stock,
to said San Joaquin Light and Power Corporation.’? Sim-
ilar charges of fraud are made regarding each and every
act involved in the entire transaction which culminated in
the resale of said stock by Casad to the defendant and the
application of the proceeds of such sale in the manner and
to the persons hereinbefore related. Following these allega-
tions, the plaintiff sets forth the reasons why the alleged
fraud was not discovered by the board of directors of the
plaintiff until after the death of Hart. These latter allega-
tions were designed to meet the plea of the statute of limita-
tions should such a plea be made upon the ground that the
action had not been brought within three years after the
alleged fraud was committed.

TM [£ the foregoing were all the facts involved in this
ease this action would in all probability never have been
begun. For it appears from these facts that plaintiff, even
if the charge of fraud could be proven, sustained but slight
damage. In the first place, all that plaintiff invested in
said 274 shares of stock was the sum of $9,989, and on a
resale thereof plaintiff was paid $9,030, which would bring
plaintiff’s actual damage down to $959. This amount is
further reduced by applying certain dividends accruing on
this stock while it was in Casad’s name and which were paid
by Casad to Hart. But it appeared after the death of Hart
that he had not only embezzled the sum of $9,030 paid to him
by Casad on the resale of the stock, but also and some time in
January, 1922, he had apparently embezzled the further
sum of $17,000 and charged this sum against the purchase
price of said stock. Plaintiff’s loss, therefore, from Hart’s
embezzlement amounted practically to the entire purchase
price of the stock. The defendant cannot, of course, be
held liable for the money embezzled by the plaintiff’s treas-
urer, Hart, unless it aided or abetted, or at least connived
at, Hart’s illegal acts in appropriating plaintiff’s money, or
unless the defendant had put it in the power of Hart to
wrong plaintiff which he could not have done except for
the acts of the defendant. [J There is not a word of

16

evidence in the whole record in this case that Casad, assum-
ing that in his dealings with Hart he acted within the scope
of his authority as the agent of defendant, had any knowl-
edge, or even suspicion, that Hart was misappropriating
the money of his employer, or that he was intending or
planning to embezzle any of the funds involved in the sale
and resale of said 274 shares of stock. Nor is there any
evidence that this transaction aided or abetted Hart, or
furnished him any opportunity that he did not otherwise
have, to commit said embezzlement. The $9,030 which he
embezzled after the resale of the stock simply replaced in
part the $9,989 which he, as treasurer of the company,
furnished for the purchase of the stock in the first instance.
Therefore, this transaction furnished no additional money
for Hart to operate upon than that which had already been
in his possession. As to the sum of $17,000, appropriated
by Hart in January, 1922, the evidence conclusively shows
that it had no connection whatever with any transaction
between Hart and Casad, except that Hart attempted to
show by fraudulent entries in the records of the mining
company that it was paid out for the purchase of the stock.
Where this money came from the evidence does not purport
to show, but it was conclusively shown that no part of it
came from the sale of the 274 shares of stock, nor was it,
or any part of it, paid to the defendant company in pay-
ment of the stock, or for any purpose whatever. The stock
had been paid for in September, 1921, by the $9,989 ad-
vanced by the mining company and the $17,000 borrowed
from Bloss. It was, therefore, impossible for any part of
this $17,000, which Hart fraudulently represented as paid
on this stock, to have been used for that purpose.

HI Coming now to plaintifi’s theory of the case, it is,
as we understand it, that plaintiff paid in full for the 274
shares of stock at the time of its purchase in September,
1921, and that, as it never parted with said stock, it is now
entitled to its return as of the date of its purchase, together
with all dividends declared thereon since its purchase up to
the time of the judgment, or in case said stock cannot be
delivered, to the value of said stock at the time of its pur-
chase, together with the amount of all dividends thereon.
Plaintiff alleged that it had paid for said stock the sum of
$26,989 on the first day of September, 1921, and defendant

ES 1°

in its answer admits this allegation, but further alleges
that, upon the resale of the stock it was repaid the sum of
$26,030, as well as certain dividends that had acerued upon
said shares of stock. As we have seen, plaintiff and de-
fendant are agreed that plaintiff paid the sum of $26,989
for said stock, but when they come to show how the pay-
ment was made they disagree. Plaintiff claims that it paid
$9,989 at the time of the purchase of the stock and $17,000
in January, 1922, no part of which has ever been repaid to
it. As we have shown, there is absolutely no foundation
supporting plaintiff’s claim that this $17,000, noted by Hart
as paid on this stock in January, 1922, was ever paid on
said stock, or that any part thereof was ever paid to de-
fendant for any purpose whatever. Eliminating this item,
there would only be left the said sum of $9,989 which was
actually paid by the plaintiff on the purchase price of said
stock, and which, as we have shown, was practically all
repaid to plaintiff. On the other hand, defendant contends
that plaintiff paid for said stock by advancing said sum of
$9,989 and by Casad, either as the agent of the plaintiff, or
as the holder of said stock in trust for plaintiff, borrowing
the sum of $17,000, which, together with the amount advanced
by plaintiff, paid for said stock in full. Without committing
ourselves as to the legal relation of Casad at the time in
question, as we have already stated, the evidence conclu-
sively shows that the stock was paid for,in the manner out-
lined in defendant’s contention. Therefore, if the plaintiff
is entitled to recover in this action, it can only recover the
purchase price of said stock, less the amount borrowed from
Bloss to pay on said purchase price, and also less the amount
paid plaintiff after a resale of said stock. This leaves, as
we have seen, the sum of $959, which was further reduced
by certain dividends paid to. plaintiff during the’time said
stock stood in Casad’s name. This amount, however, can
be recovered against the defendant only in case Casad in
the transactions involved in the purchase and resale of said
stock was acting within the scope of his authority, as dis-
trict manager of the defendant in the Merced district, or
if defendant ratified the acts of Casad in said transaction.

HE We are mindful of the fact that the verdict of the
jury in favor of the plaintiff is tantamount to an implied
finding upon all issues made by the pleadings which would

a

12

include the issue as to whether Casad in the transactions
involving the sale and resale of said stock was acting within
the seope of his authority, as the district manager of the
defendant. Therefore, if there is any substantial evidence
supporting plaintiff’s claim that Casad in the transaction
was so acting, the implied findings of the jury cannot be
disturbed on appeal.

The evidence showed that Casad was district manager of
the defendant. As such he had only limited powers. While
he was authorized to solicit business for his principal, that
is to sell electrical energy to residents of his district to be
used for light and power purposes, to collect the bills due
the company for that service, and also to solicit the sale of
an issue of stock known as prior preferred stock of the
kind involved in this action, when his action involved mat-
ters outside of these just mentioned his authority was sub-
ject to approval by the regular officers of the company.
This was apparent and particularly so to the plaintiff from
the limited part taken by Casad in the transactions between
the plaintiff and defendant herein which culminated in the
agreements whereby the defendant agreed to extend its
power line to plaintiff’s mine and the latter agreed to pur-
chase and pay for electrical energy to operate the mine.
While Casad solicited this business the final contracts be-
tween the parties were executed on behalf of the defend-
ant by regular officers of the company, and not by Casad,
either in the capacity of district manager, or otherwise. It
is true that the agreement to perform the labor of digging
the holes for the poles to be used in the extension of the
pole line was signed by Casad as district manager of the com-
pany. But this contract was of minor importance in com-
parison with the other two contracts, and the fact that
Casad hatl no authority to act in these major matters was
direct and positive notice to plaintiff that Casad’s position
as district manager clothed him with only limited or special
powers. [J In such a case the legal principle is appli-
eable that where an agent acts under a special or limited
authority, the party dealing with him is bound to know
at his peril what the power of the agent is, and to under-
stand its legal effect. (1 Cal. Jur., p. 715.) This principle
is more fully but aptly stated as follows: ‘‘It is therefore
declared to be a fundamental rule, never to be lost sight of

eS 3:

and not easily to be overestimated, that persons dealing
with an assumed agent, whether the assumed agency be a
general or special one, are bound at their peril, if they
would hold the principal, to ascertain not only the fact of
the agency but the nature and extent of the authority, and
in case either is controverted, the burden of proof is upon
them to establish it.”? (Mechem on Agency (2d ed.), vol. 1,
p. 527.)

The part taken by Casad in having the 274 shares of
stock issued in his name and in borrowing money thereon to
be applied on their purchase price was not done at the
instance of or in the interest of the power company, but as
an accommodation to Hart, as a representative of the min-
ing company, in order to enable the mining company to
fulfill its contract to purchase said shares of stock. And
when Mr. Alexander, the stock sales manager of defendant,
assented to this plan he did so, not for the purpose of gain-
ing any advantage for his own company, but to enable the
mining company to secure the necessary funds to pay for
said stock. It must be borne in mind that this whole trans-
action, of which the mining company complains, took place
entirely after the mining company had bound itself by
written agreement to buy said stock at the agreed price of
$98.50 per share, and whatever Casad did independently, .
or with the consent of Mr. Alexander, in connection with
this transaction, was done for the purpose of assisting the
mining company to carry out the terms of said written
agreement. The evidence fails to show that in these
matters Casad was acting within the scope of his employ-
ment. On the other hand, the evidence shows that in so
acting he stepped outside the course of his duties and
powers as the district manager of the defendant, and per-
formed acts wholly foreign to and inconsistent with his em-
ployment, and for the purpose of accommodating and assist-
ing his friend, Hart, who, Casad had every reason to believe,
was not only acting for the plaintiff mining company, but
was also looking after his interest. It follows, therefore,
that the defendant cannot be held liable for the acts of
Casad, which were not within the scope of his authority as
the district manager of the defendant, and that the judg-
ment herein against the defendant predicated upon the acts
of Casad cannot be maintained.

16

HI As we view this unfortunate affair, whatever loss
has been sustained by the plaintiff in this action was en-
tirely due to the dishonest actions of its trusted employee
and officer, Hart. While the directors of the plaintiff testi-
fied that Hart was not given any specific authority to take
the certificates of stock in the name of Casad, or to borrow
money thereon, either in the name of the company or in
Casad’s name, they also testified that Hart had entire
charge of the business affairs of the mining company, and
the president of the company, Mr. Kocher, stated in regard
to this stock transaction, ‘‘I had entire confidence in Mr.
Hart. The board of directors with myself included gave
Mr. Hart full authority to buy this stock for the mining
company. I did not tell him how to do it, nor as to the
manner in which he should handle it. I had enough con-
fidence in him to believe that he would handle it in the
proper way, he had full charge of the matter.’? With the
evidence showing that Hart possessed these broad powers,
it is difficult to perceive how the company can shift the loss
due to his dishonest management of its affairs on to the
defendant or on to anybody else without showing some
fraudulent conspiracy between Hart and the person to be
charged. Even if Casad fraudulently conspired with Hart
_to defraud the mining company out of said stock or of any
money connected with the purchase or resale of said stock,
as such acts of Casad were wholly outside the scope of his
authority as the agent of the defendant, any loss sustained
by the plaintiff by reason of this fraudulent conspiracy
cannot be recovered from the defendant. [J We are not
satisfied, however, that the evidence shows any fraudulent
conspiracy existed between Hart and Casad. Whatever
Hart’s intention and purpose were in this transaction, there
is no evidence that Casad was party to any fraudulent or
dishonest act, committed by Hart, or that he had knowledge
of any fact that would put him upon notice of Hart’s
fraudulent purposes. Casad in this whole transaction acted
upon the suggestion and under the direction of Hart.
When it was first suggested to him by Hart that the stock
be placed in his name and that he borrow money thereon
to be applied on its purchase price, he objected to the sug-
gestion for the reason, as stated by him at the time, that
he did not want to use his credit in that manner. But at

ES 2°:

the earnest and persistent solicitation of Hart, and upon
the assurance of Hart that he had full authority from the
mining company to handle the transaction as he wanted to,
Casad finally agreed to the plan suggested by Hart. Casad
trusted Hart implicitly, as did the directors of the mining
company, the officials of the bank, and the people generally
in that community. There is not one word of evidence
that would justify the inference that Casad had any knowl-
edge or even suspicion that Hart was dealing falsely with
his company. There is also the further fact that Casad
did not in any manner profit by any of Hart’s dishonest
conduct. The evidence does not show that one dollar of
Hart’s ill-gotten gains found its way into Casad’s pockets.
Casad was simply deceived by Hart as were the many
others who had so implicitly trusted him. The inference
of fair dealing on the part of Casad to be drawn from
the evidence in this case is exceedingly strong, and we
think greatly outweighs any inference of fraud. J ‘If
there be two inferences equally reasonable and equally sus-
ceptible of being drawn from the proven facts, the one
favoring fair dealing and the other corrupt practice, it is
the express duty of court or jury to draw the inference
favorable to fair dealing. (Citing authorities.) For fraud
must always be proved, so that when the plaintiff’s case
goes no further than to establish a state of facts from
which the inference of fraud may or may not be reason-
ably drawn, he has failed to establish his charge by a
preponderance of the evidence, and it becomes the duty
of court or jury, as has been said, to find in favor of
innocence and uprightness.”” (Ryder v. Bamberger, 172
Cal. 791, 799 [158 Pac. 753, 756].) Other authorities might
be cited to the same effect, but the rule announced above
is so well established that further reference to the adjudi-
eated cases of this state is unnecessary. This rule goes
further than the necessities of this case, as it is most
difficult for us to draw any inference of fraud from the
conduct of Casad in his dealings with Hart in reference
to the purchase and resale of said stock. As Hart was the
agent of the plaintiff, invested with broad powers, and as it
was solely through his dishonest dealings that plaintiff has
been caused to lose its money and property, no recourse
for this loss can be had in this action against defendant.

166 be

Defendant at the close of plaintifi’s evidence made a motion
for a nonsuit. It should have been granted, and the
court erred in denying said motion.

In view of our determination of the questions stated
above, it is unnecessary for us to pass upon the question of
the statute of limitation or that the action is one in equity
and the judgment should be reversed by reason of the fail-
ure of the trial court to make findings.

The judgment is reversed with directions to the trial court
to set aside the verdict rendered herein, and render judg-
ment in favor of the defendant.

Rehearing denied.
De

[Orim. No, 3652. In Bank—Iebruary 28, 1934.]
THE PEOPLE, Respondent, v. GEORGE HALL, Appellant.

tm
S
PT

S. Luke Howe, 8. F. Meldon, William V. Cowan and
Marshall B. Woodworth for Appellant.

U. §. Webb, Attorney-General, and J. Charles Jones,
Deputy Attorney-General, for Respondent.

WASTE, C. J—Defendant appeals from a judgment of
conviction carrying the extreme penalty and from orders
respectively denying motions for new trial and in arrest of
judgment.

‘We have exhaustively examined the record in this case
and unhesitatingly declare that the evidence discloses a
ruthless and cold-blooded homicide justifiably characterized
by the jury in its verdict as murder in the first degree. On
March 8, 1933, the witness Ballinger, a United States cus-
toms operator or patrol inspector, had occasion to search an
automobile in Seattle Heights, which is approximately fifteen
miles north of the city of Seattle in the state of Washington.
Upon such search he discovered two Thompson submachine
guns and six automatic pistols. These weapons were new
and still in the factory cartons. As he was about to take
the driver of the car into custody he was approached from
the rear by the defendant herein and rendered unconscious
by several blows on the head. When he regained conscious-
ness he found himself handeuffed and locked in the luggage
compartment of a moving automobile. Several hours later
the car was stopped and the witness removed from his place
of imprisonment. A conversation followed between defend-
ant and his companion, referred to throughout the trial as

a a 169

John Doe, as to the disposition to be made of the witness,
the defendant saying ‘‘Let’s ‘bump’ him.’’ This suggestion
was rejected and the witness again bundled into the luggage
compartment of the car. After several more hours of driv-
ing the car was again stopped and, under cover of darkness
and while blindfolded, the witness was removed to another
car accompanied by John Doe. He was later left hand-
euffed to a tree. The defendant proceeded on alone. Later
he picked up a hitch-hiker who was with him at the time of
the homicide and who testified upon the trial for the prose-
eution. As the defendant’s car entered the city of Yreka
in Siskiyou County, shortly after 7 o’clock on the evening
of March 10, 1933, it was pursued by two automobiles con-
taining the decedent, a state traffic officer, the sheriff and
two of the latter’s deputies, these officers having in the
meantime received information over the teletype that de-
fendant was approaching. The sheriff’s car, with its siren
screeching, raced alongside of the defendant’s car and de-
fendant was commanded to stop. In disregard of this com-
mand defendant increased the speed of his car in an effort
to elude his pursuers. After several unsuccessful attempts
to stop defendant’s car by turning off the ignition, the
hitch-hiker, who had previously innocently joined defendant,
succeeded in bringing the car to a halt by pulling on
the emergency brake. The decedent thereupon came along-
side of defendant’s car and informed him that the sheriff
was approaching. At the time, decedent was wearing his
highway patrol officer’s badge in plain view on the outside
of his leather jacket and was also wearing his insignia on
his cap. Without a nioment’s hesitation, and in the imme-
diate view and presence of his hitch-hiker companion, the
defendant pulled out an automatic pistol and shot the de-
eedent. He died almost instantly. In the shooting affray
that followed between defendant and the other officers, a
deputy sheriff was also shot dead. The defendant was
wounded and after a short chase and struggle was taken
into custody. Upon the trial of the cause defendant took the
stand in his own defense and admitted the shooting. He
testified, however, that he did not know that decedent was
an officer and that he shot him because he thought decedent
was reaching for a gun. The jury rejected this defense and
properly so in view of the companion hitch-hiker’s testi-

170 Le 7

mony that he had informed defendant prior to stopping the
car that the pursuers were officers of the law. This witness
also testified that the only movement made by the decedent
at the time was to motion the defendant back into the car.

Hi ‘We will now take up defendant’s several assign-
ments of error. It is first urged that the court below erred
in denying his motion for change of venue. The motion
was supported by two affidavits, signed, respectively, by the
defendant and a resident of Siskiyou County, wherein it was
averred that the decedent was well known and exceedingly
popular in the county and that his demise had given rise
to lynching threats against the offender. In opposition
thereto the sheriff and the district attorney filed affidavits
wherein each averred that while the homicide had caused
some excitement in the county there had been no threats
or demonstrations against the defendant, each affiant giving
it as his opinion that the defendant would and could be
assured of a fair and impartial trial. Under the circum-
stances, and because of its proximity to and familiarity
with conditions prevailing in the county, we are not pre-
pared to say that the trial court abused the discretion
vested in it when it denied the motion for change of venue.
(People v. Congleton, 44 Cal. 92, 95; People v. Goldenson,
76 Cal. 328, 337-339 [19 Pac. 161].)

Nor do we perceive any abuse of discretion in the
denial of defendant’s motion for a continuance of the trial.
(People v. Goldenson, supra.) The record is silent as to
the grounds urged for the requested continuance. It ap-
pears, however, that defendant was arraigned on March 16,
1933, and ‘‘by agreement of respective counsel the court
fixed Monday, April 8rd, 1933... as the time for trial’.
It was not unreasonable on the part of the court to require
defendant to stand trial on the agreed date, eighteen days
subsequent to his arraignment.

Hi At the time of his arraignment defendant, who was
accompanied by counsel, remained mute whereupon the
court below directed the clerk to enter a plea of ‘‘not guilty’’
on behalf of defendant. Such a plea was entered. Sub-
sequently, and at the inception of the trial, counsel for
defendant tendered a plea of ‘‘not guilty by reason of in-
sanity?’ in addition to the plea on the general issue entered.
at the time of defendant’s arraignment, contending that since

— a 17

the separation of these two pleas (Stats. 1927, p. 1148) it
is incumbent on the court to direct the entry of both pleas
when a defendant stands mute upon his arraignment. The
court rejected the tendered plea on the ground it came too
late. We find no error in this ruling. Had the legislature
intended the result contended for by defendant it undoubt-
edly would have amended section 1024 of the Penal Code
when in 1927 it provided for a separation of the two pleas
above mentioned. Since 1880 the cited section has pro-
vided that ‘‘If the defendant refuses to answer the indict-
ment or information by demurrer or plea, a plea of not
guilty must be entered.’”? The court below fully complied
with this section. No provision is therein made for the
entry of a plea of ‘“‘not guilty by reason of insanity’.
Moreover, section 1016 of the same code declares that ‘‘A
defendant who does not plead not guilty by reason of in-
sanity shall be conclusively presumed to have been sane at
the time of the commission of the offense charged...”
In other words, for a defendant to avail himself of the de-
fense of insanity, it is essential that he seasonably offer
such a plea.

As already stated, the defendant was arraigned on
March 16, 1933, at which time the court, by reason of de-
fendant remaining mute, directed the entry of a plea of
“not guilty’’. Thereafter and on March 28, 1933, an
amended information was filed. So far as the homicide of
which defendant stands convicted is concerned, the charging
part of the amended information is identical with the
original. There was added, however, a reference to the
suffering by defendant of a prior felony conviction. On
March 29, 1938, the defendant was arraigned on the
amended information at which time he admitted having
suffered the prior felony conviction. No other or additional
plea was offered or received. At the conclusion of the
prosecution’s case defendant moved for a dismissal on the
ground that no issue had been joined under the amended
information. The motion was properly denied. The homi-
cide charge was identical in the original and amended in-
formations. ‘There was no necessity, therefore, for a repeti-
tion of the plea on the general issue. The cause proceeded
to trial and defendant at all times received the benefit of
a plea of ‘‘not guilty’. It follows that defendant’s sub-

172 Le 7

stantial rights suffered no detriment by reason of the
failure to repeat the plea. (People v. Thal, 61 Cal. App.
48, 51, 52 [214 Pac. 296]; People v. White, 47 Cal. App.
400, 408 [190 Pac. 821]; People v. Tomsky, 20 Cal. App.
672, 678-686 [180 Pac, 184].)

The point is made that the court erred in denying
defendant’s challenges for cause as to certain jurors. On
this point the defendant’s brief states that ‘Inasmuch as the
reporter’s transcript omits the proceedings relating to the
impanelment of the jury, appellant must reserve his presen-
tation of this point until that part of the record is brought
up under an order of this court and proceedings which are
to be instituted for that purpose.’’ Defendant has not in-
stituted proceedings for diminution of the record and con-
sequently we have not now before us that part of the record
having to do with the selection of the jury. Inspection of
the record discloses, however, that there has been included
therein the voir dire examination of two of the jurors chal-
lenged for cause by the defendant. Wach of said challenges
was, in our opinion, properly denied. While it is true that
the early portion of counsel’s examination of these particular
jurors tends to disclose some confusion in their respective
minds and tends to indicate that each entertained an opinion
requiring evidence to remove, the situation was materially
clarified by the trial court’s subsequent examination of said
jurors at the conclusion of which it was immediately ap-
parent that as veniremen they would enter upon a considera-
tion of the cause with open minds and would be governed
solely by the evidence adduced and the court’s instructions on
the law. Nowhere does it appear that defendant was’ re-
quired to accept an objectionable juror. On the contrary,
the transcript indicates that both sides were satisfied with
the jury finally selected to try the cause.

It is next urged that the court erred in admitting
the testimony of the witness Ballinger, the federal officer,
who testified that shortly prior to the homicide he was
knocked unconscious, imprisoned and unwillingly trans-
ported in an automobile by the defendant and his confeder-
ate. Defendant objected to the introduction of this evidence
as being too remote and as tending to establish the commission
of a separate and independent offense. The evidence was
offered by the prosecution and admitted by the court for the

| Es 173

limited purpose of showing motive. The jury was instructed
that it was to be considered for that purpose alone. It was
admissible for the purpose designated as it tended to estab-
lish that in perpetrating the homicide it was the defendant’s
desire to avoid arrest for the prior offense committed against
the witness Ballinger. That the evidence complained of
tended to show the commission of such prior and separate
offense, or tended to prejudice the defendant before the
jury, did not make it inadmissible. (People v. Rocco, 209
Cal. 68, 71, 72 [285 Pac. 704]; People v. Nakis, 184 Cal. 105,
114 [198 Pac. 92]; People v. Walters, 98 Cal. 138, 141 [32
Pac. 864].)

|| Defendant complains of the instruction by which the
jury was informed of the purpose for which this particular
evidence was admitted. The instruction contains a correct
statement of the law and is not objectionable in the particu-
Jars urged by defendant.

Nor do we find any error in the giving of the in-
struction on flight. As already related, the defendant imme-
diately fled the scene of the shooting. He was captured only
after a chase and physical encounter. Under the authori-
ties, it was proper to inform the jury that it might consider
this fact in determining defendant’s guilt or innocence.

HI Defendant next urges that the court below erred in
refusing three requested instructions having to do with the
authority of state traffic officers and with the authority, or
lack of authority, of peace officers generally to arrest without
a warrant, We find no error in the court’s refusal to give
the proposed instructions. The entire subject was fully
and properly covered by five instructions given to the jury
and appearing at pages 873-375 of the reporter’s transcript.
(Secs. 834-837, Pen. Code.)

‘What has been said sufficiently answers defendant’s con-
tentions on appeal. It follows that the judgment and orders
appealed from must be, and each is, affirmed.

Curtis, J., Langdon, J., Preston, J., Thompson, J,
Shenk, J., and Seawell, J., concurred.

A rehearing was denied on March 29, 1934, and the fol-
lowing opinion then rendered thereon:

THE COURT.—The petition of the appellant for a rehear-
ing in this cause is denied.

174

Due consideration has been given to the renewed conten-
tion of the appellant that when, at the time of the arraign-
ment of the defendant, he remained mute, the court below
should have directed the clerk to enter a plea of “not guilty
by reason of insanity’’, as well as the plea of ‘‘not guilty’’,
which was entered.

An appeal to the Supreme Court of the United States in
the above cause was dismissed on June 4, 1934. (Hall v.
California, —— U. 8. —— [78 lL. Ed. (Adv. Ops.) 1025].)

[Sac. No. 4809. In Bank—Fobruary 28, 1934]

NEVADA LAND AND INVESTMENT CORPORATION
(a Corporation), Respondent, v. Z. R. SISTRUNK et al.,

Appellants,

SS

A. G. Bailey for Appellants.

Rich, Weis & Carlin for Respondent.

THOMPSON, J.—The defendants herein, Z. R. Sistrunk
and his wife, Cora Sistrunk, have appealed from a judgment
decreeing that the agreement, whereby the plaintiff had agreed
to sell to the defendants the lands described in the complaint,
be canceled; that plaintiff be restored to the full possession
thereof and the defendants be ejected and enjoined from
asserting or claiming any right, title or interest therein.
By its complaint the plaintiff set up that the Garden High-
way Orchard Company was the owner in fee and entitled to
the possession of the premises in dispute and that on April
28, 1925, it entered into an agreement with the defendants
for the sale thereof, a copy of which contract was attached as
an exhibit; that the defendants went into possession under
the contract and were occupying the premises; that on No-
vember 16, 1927, the Garden Highway Orchard Company
had assigned and transferred to the plaintiff all its right,
title and interest in and to the premises and the payments
due under the contract with defendants and that plaintiff
is now the owner of the land and has performed all the cove-
nants and conditions of the agreement. There follow alle-
gations of the default of the defendants, of the provision in

|

the contract for forfeiture in such case at the option of
the seller and of the service of notice by the plaintiff in
pursuance thereof declaring the exercise of the option and
the termination of defendants’ rights under the contract and
that the defendants had refused to surrender possession.
The prayer of the complaint was for restitution of the land,
damages for the withholding in the sum of $250, the rents
and profits, alleged to be of the value of $184.28, and that
the agreement for the sale be canceled and title quieted in
the plaintiff.

By their answer the defendants admit that they went into
possession under the contract of sale, but deny that they
still claim thereunder, asserting that the premises are en-
tirely paid for and that they are the owners in fee. They
deny that any payments are due to the plaintiff and that
plaintiff is the owner of the land and allege that the Garden
Highway Orchard Company had no right, title or interest
in the lands at the time of its assignment and transfer to
the plaintiff. They admit the service of the notice alleged
in the complaint, but deny the unlawful detention and the
allegations of damage. As an affirmative defense and by
way of cross-complaint it is set up that the execution of the
contract was induced by the fraudulent representation of -
the Garden Highway Orchard Company as to the quality
of the soil; that the agreed purchase price was $4,700 or
$500 an acre; that the total paid on the contract before the
discovery of the fraud was $1863.58, which amounted to
$1393.58 more than the value of the premises, which were
not worth more than $50 an acre; that the defendants had
been damaged in the sum of $450 per acre or a total of
$3,760; that the sums paid on the contract to the plaintiff
before the discovery of the fraud were in excess of the reason-
able value of the land and were in full performance of the
contract and that the defendants were entitled to a deed and
to possession of the premises, The cross-complaint asks that
title be quieted in the defendants; for damages in the
amount of $1393.58; that all the remaining payments (total-
ing $1896.42) be canceled and that the contract be canceled.

Plaintiff’s demurrer to the cross-complaint was sustained
without leave to amend and its motion to strike the allega-
tions of fraud contained in the answer was granted. Upon
this state of the case and upon a stipulation made for the

|

sole purpose of supplying a statement of facts, the judgment
.appealed from was entered.

The ruling of the trial court upon the motion to strike
and upon the demurrer to the cross-complaint has deprived
the appellants of the opportunity to recover for the alleged
fraud of the respondent except by a separate suit. The
right of the defrauded vendee to set up the fraud of the
vendor by way of ‘‘defensive relief?’ as an answer to the
demand, or in abatement of damages in a suit for the pur-
chase price, has been recognized in numerous cases: Paolini
v. Sulprizio, 201 Cal. 687 [258 Pac. 280]; Gardner v. Cook-
son, 213 Cal. 859 [2 Pac. (2d) 870]; and see Elm v. Sacra-
mento Suburban Fruit Lands Co., 217 Cal. 228 [17 Pae.
(2d) 1003]. In Paolini v. Sulprizio, supra, it was said by
this court: ‘‘In harmony with this principle, which permits
the buyer to retain the property and bring suit for the
‘recovery of damages which he has sustained, there is a third
course open to a defrauded vendee. He may set up the
seller’s fraud as a partial defense or counterclaim without
any offer of restitution, and recoup his damages in the action
brought by the guilty party to the contract. (Field v.
Austin, 181 Cal. 379, 382 [63 Pac. 692]; Hunter v. McKKen-
zie, 197 Cal. 176, 184 [239 Pac. 1090]; Palladine v. Imperial
Valley etc. Assn., 65 Cal. App. 727, 749 [225 Pac. 291].)
This remedy has been styled ‘defensive relief’, whereby the
fraud is set up by way of defense to defeat an action brought
to enforce an apparent obligation or liability. (Zoby v. Ore-
gon Pac. R. R., 98 Cal. 490, 499 [83 Pae, 550].) The fraud,
given in evidence as a defense, ‘will be an answer to the
whole demand, or in abatement of the damages, according
to the circumstances of the case. This is the true as well as
a salutary rule, and well calculated to do final and complete
justice between the parties, most expeditiously and least
expensively.’ (Field v. Austin, supra, p. 382.) It may also
be taken to be well settled in this jurisdiction that in such
cases the defrauded party may withhold payments under the
contract, to recoup the damages which may be recovered,
(Pembrook v. Houston, 41 Cal. App. 54 [181 Pac. 828];
Palladine v. Imperial etc. Assn., supra.) But in any event
the party guilty of the deceit is entitled to have the damages
mitigated to the extent of the nonperformance of the other
party to the contract.’? (Italics ours.)

a

1

While in that case the action instituted by the ven-
dor was for the recovery of the balance due under the con-,
tract, whereas the present suit is one to declare a forfeiture,
to recover possession and quiet title in the vendor, the two
cases cannot logically be distinguished on that ground. If,
as therein held, the defrauded party may withhold pay-
ments due under the contract to recoup the damages which
may be recovered, thus using the fraud of the vendor to
avoid his own apparent obligation under the contract, it
ean hardly be contended that the fraud of the vendor will
not also serve as an excuse for his apparent default and as
a defense to an action to have the contract canceled and
title to the property quieted. There would be little con-
sistency or justice in a rule which, when the suit was for
the payments due under the contract, would allow the buyer
to set up damage caused by the fraud of the seller in an-
swer to the demand or in abatement of damages, but, when
the action was one for possession of the premises and to
quiet title, would not allow the same matter to be pleaded
as a defense against a forfeiture for failure to make the
payments which the law says he may withhold. The action
of the trial court in striking the affirmative matter from the
answer was therefore erroneous. An effort is made to con-
strue some general language in Hincksman v. Delacour, 47
Cal. App. 416 [190 Pac. 832], to the contrary, but the ruling
in that case is not in conflict herewith, and the general
statements must be confined to the facts of that case.

The instant case must not be confused with those cases, of
which there are several, in which the purchaser attempts to
retain possession of the property without payment of the
purchase price and yet seeks to disaffirm the contract either
by reason of the failure of title in the vendor, or by reason
of fraudulent representations on the part of the vendor.

HJ The remaining question raised by this appeal is the
propriety of the defendants’ cross-complaint. If the cause of
action for fraud was properly pleadable either as a counter-
claim or as a cross-complaint the order sustaining the de-
murrer without leave to amend was error. (Luse v. Peters,
219 Cal. 625 [28 Pace. (2d) 357]; Terry Trading Corp. v.
Barsky, 210 Cal. 428 [229 Pac. 474].)

Without deciding the propriety of this pleading as a
counterclaim, we are of the view that the defendants’ cause

7

of action for fraud comes within the “transaction clause’’ of
section 442 of the Code of Civil Procedure, which prescribes
what matter may be set up by way of cross-complaint. This
conclusion is in accordance with the rule of the later cases
which have approved a broader and more liberal interpreta-
tion of the ‘‘transaction’’ upon which the action is brought.
(Hanes v. Coffee, 212 Cal. 777 [800 Pac. 963]; California
Trust Co. v. Cohn, 214 Cal. 622 [7 Pac. (2d) 297], dis-
tinguishing and expressly disapproving earlier cases which
adhere to a stricter interpretation of the ‘transaction
clause”? of the ecross-complaint statute.) Especially apt
language is found in the two eases cited. In Hanes v. Coffee,
supra, it is said: ‘It would appear that this action to quiet
title arises out of the fact that the defendant claims an
interest by virtue of a lease by plaintiffs; that which [while]
plaintiffs deny defendant’s right to possession, defendant
asserts his rights and secks damages for its violation; that
consequently both claims are related to the same transaction,
i.e, the leasing of the property, and each must be ad-
judicated upon a consideration of the same issues.”? And,
in California Trust Co. v. Cohn, supra, similar language
was employed: ‘‘So far as we are now informed defendants’
only connection with the property to which plaintiff seeks
to have its title quieted arises out of the written instrument
sought to be reformed. It is obvious therefore that the
quiet title action is aimed or directed at any and all claims
and demands made by the defendants under said written
instrument. In other words, the pleadings now before us
tend to indicate that were it not for the defendants’ claims
under the written instrument which it is herein sought to
have reformed, there would have been no necessity for the
institution of plaintiff’s quiet title action. This being so,
both claims are necessarily related to the same transaction.’’
So here, although it is true that the defendants’ cause of
action for fraud is not on the contract, but is collateral
thereto (Paolini v. Sulprizio, swpra), it nevertheless arose
out of the same transaction as the plaintiff’s cause of action.
With equal truth it may be said of the instant case that,
were it not for the written instrument, which the defendants
claim they were induced to execute by the fraud of the
plaintiff’s predecessor, there would have been no necessity
for the institution of the present action. The basis of

|]

plaintiff’s: cause of action rests on the alleged breach of the
contract by the defendants. It is alleged in the complaint
that defendants went into possession under the contract;
the unlawful character of the possession only arose upon
default. The basis of defendants’ cross-claim is the con-
tention that they have fully performed the contract except
in so far as the failure to do so is offset and counteracted
by the damages due them from the plaintiff, and they as-
sert a right to possession and to have title quieted in them-
selves. The claimed damages themselves grow out of the
asserted fraudulent conduct of the plaintiff’s predecessor
in interest in placing the defcndants in their present posi-
tion.

The facts surrounding the cause of action and not
the form of the complaint are determinative of what con-
stitutes the transaction. (Martin v. Hall, 219 Cal. 334 [26
Pac. (2d) 288]; California Trust Co. v. Cohn, supra;
Hanes v. Coffee, supra; Terry Trading Corp. v. Barsky,
supra; Story & Isham Commercial Co. v. Story, 100 Cal.
81 [384 Pace. 671].)

The cross-complaint might also be said to be a cause
of action ‘‘affecting the property to which the action relates’’
and, on that account also, to come within the purview of the
eross-complaint statute, for, although the action is for
possession, the complaint also sets up ownership in the
plaintiff and asks that its title be quieted.

It remains only to briefly notice the case of Watkins v.
Warren, 122 Cal. App. 617 [10 Pac. (2d) 500] which the
respondent urges in support of its position. It was there
said that fraud in the procurement of the contract is neither
proper answer nor counterclaim where the action is in
ejectment and the plaintiff seeks possession only and not
the remainder of the purchase price, for the reason that an
equitable defense cannot be based upon a contract which
the defendant has failed to perform and because the claim
cannot be said to arise out of the same transaction. It is
to be noted that the action there was for possession only,
whereas here if defendants’ allegations are sustained plain-
tiff’s action is defeated im toto and defendants are entitled
to have title quieted in them. The language therein to the
effect that a claim for damages does not arise out of the
same transaction as an action upon or for cancellation of

ee 181

the contract, being out of harmony with Hanes v. Coffee,
supra, and California Trust Co. v. Cohn, supra, must be
disapproved.

The judgment is reversed.

Langdon, J., Curtis, J., Preston, J., Waste, C. J., Shenk,
J., and Seawell, J., concurred.

[Sec. No, 4795. In Bank—Webruary 28, 1934.]

T. L. REED COMPANY (a Corporation), Respondent, v.
J. R. KRUSE, Appellant.

&
8

C. E. McLaughlin and Porter McLaughlin for Appellant.

Everts, Ewing, Wild & Everts, C. L. Clark, Dan F. Con-
way, L. N. Barber and Butler, Van Dyke, Desmond &
Harris for Respondent.

PRESTON, J—Action for an accounting upon sale of
land by a surviving trustee pursuant to the provisions of a
deed of trust. Plaintiff alleged that the money received by
defendant trustee at the time of sale was $15,000 in excess
of the sum required to discharge the indebtedness under the
trust deed, together with advancements and expenses, includ-
ing costs of sale. Defendant answered, alleging that he sold
the property for $61,043.30, the exact sum required to satisfy
said items. Upon conflicting evidence the court found that
defendant received from the purchase price of said property
$5,000 in excess of the amount required to discharge the
indebtedness of plaintiff and sums otherwise advanced and
secured by said deed of trust. Judgment followed for plain-
tiff accordingly and defendant appealed.

The record fails to show the particular items which went
to make up the $5,000 award to plaintiff but it does contain
evidence amply sufficient to support the findings and judg-
ment, as hereinafter set forth,

| 188

The trust deed was given to secure a $40,000 promissory
note and later advancements made in behalf of plaintiff.
Plaintiff defaulted and defendant took possession of and
conducted farming operations on the premises from January
2 to June 10, 1929. At sale of the property, held on the
latter date, it was bid in by the beneficiary named in said
deed of trust for the exact amount due according to its
records, to wit: $61,048.30. In calculating the sum to be
bid, the beneficiary included the principal debt, interest,
costs and expenses, and in addition, a $2,000 attorney’s fee
and expenses incurred in farming the land during the afore-
said period of occupation, including $1500 for services of a
supervisor who had possession of and operated the farm.
During said occupancy a number of fruit-trees were severed
and the wood therefrom was cut and partly corded. After
sale of the property, this wood, which had remained thereon,
was sold by the purchaser at a profit of perhaps $1500 but
plaintiff was not given credit for such sum or any part
thereof.

HM The deed of trust provided that the trustee should
pay the expenses of sale, including an attorney’s fee in a
fixed amount. But here no fee was actually paid to any
attorney. Apparently necessary legal duties were performed
by general counsel for the beneficiary, an insurance company.
These facts justify disallowance of the attorney’s fee of
$2,000. The purpose of said provision of the trust deed was
to place a limit upon the amount of fee which could be
charged, not to bind the trustor to pay such a sum if it was
not actually expended or incurred as an expense of the sale.

HB Disallowance of the compensation paid to the super-
visor during the time he occupied and operated the farm on
behalf of the beneficiary is also justified. The evidence
shows that this supervisor was a general agent employed by
said company at a salary of $250 a month to superintend all
of its farming operations. There is no showing of the time
devoted to superintending operations on the property here
involved during the said period of occupancy prior to sale,
or of any apportionment of the compensation paid said
supervisor as between this property and other ranches or
lands which he managed for his employer. While the deed
of trust provided that the beneficiary should judge the ex-
pense necessary to keep the property in good condition and

'

184 ee 7

repair, it was necessary for said company to show the sums
actually expended by it before claiming credit. Here, as
above stated, there was a failure of proof of the amount
paid said supervisor with respect to this particular property.

HB The allowance to plaintiff of a sum equal to the
profit received from sale of wood on the premises is also
justified. The trees were removed after plaintiff’s surrender
of the property but it was charged with the labor costs
incidental to their removal. It was the duty of defendant
trustee, during his occupancy and management of the prem-
ises, to sell this wood and apply the proceeds of sale to pur-
poses of the trust or to otherwise account to plaintiff there-
for. But the trustee allowed the wood to stay on the land
and the purchaser thereafter sold it. The court was justified
in charging said trustee with its reasonable value, which was
placed by one witness as high as $3,600.

From the above discussion it will be seen that if plaintiff
were allowed credit for the three items mentioned, $2,000
attorney’s fee, $1500 salary of supervisor and $1500 for
wood, this would afford a proper basis for the $5,000 judg-
ment in his favor.

Hi But appellant further asserts that the court erred in
failing to take into consideration and give him credit for
$9,895.84 on account of taxes and assessments on the prop-
erty, delinquent at the time of sale and subsequently paid by
the purchaser. This contention is without merit. The bene-
ficiary purchased the property at public sale, subject to the
delinquent taxes, and was thus able to make the purchase for
a sum lower by that amount. Had appellant, as trustee, paid
said taxes and assessments, the sum realized from the sale
would have been greater to the amount of the delinquencies.
Had the beneficiary, as such, paid the taxes prior to sale of
the property, it would have been entitled, under the deed of
trust, to reimbursement therefor, but it certainly may not
claim this credit for payments made subsequent to the sale
when its relation of beneficiary had terminated and it was
acting in its capacity as purchaser of the property..

The judgment is affirmed.

Shenk, J., Curtis, J., Langdon, J., Thompson, J., Seawell,
J., and Waste, C. J., concurred.

a a 185

[L. A. No, 14552, In Bank—February 28, 1934,]

GLADYS CURTIS, Appellant, v. ELLA I. KASTNER,
Respondent.

et
oO
a

Edward T. Lannon for Appellant.
Chester C. Kempley for Respondent,

SEAWELL, J.—In this action the trial court, sitting with-
out a jury, found that the injury for which plaintiff sought
to recover damages was proximately caused by her negli-
gence and failure to exercise ordinary care for her own
safety. Plaintiff struck her head with great violence against
a projecting rafter of defendant’s garage, which rafter she
failed to observe, and thereby sustained injuries to her neck
and spine, including a chip fracture of the fifth cervical
vertebra.

Both plaintiff and defendant reside in the block bounded
by Torrey Road, Prospect Street, Virginia Way and Ex-
change Street in La Jolla Park, city of San Diego, this state,
Said block is bisected by a paved alley twenty feet in width,
known as Bluebird Lane, which runs from Prospect Street
to Exchange Street. Plaintiff resides on Virginia Way in
the middle of the block. Defendant’s residence is at the
corner of Torrey Road and Prospect Street, and fronts on
Torrey Road. Defendant’s garage, at the rear of her lot,
faces Prospect Street and is placed back some distance from
the property line on said street. The side wall of the garage
building is inside defendant’s rear property line on said
alley, but the sloping eaves and rafters of the garage, ex-
tending from a center ridge pole, project beyond the side
wall of the garage and into the alley approximately fifteen
inches at the front of the garage and seventeen inches at the
rear. The edge of the roof is at a height of five feet seven
and three-quarters inches above the pavement of Bluebird
Lane. The rafters which support the roof are plainly visible

— ee 187

beneath it. The thirteen rafters, which are of six-inch
Jumber, are sawed off at a sharp angle as they reach the
edge of the roof, with the result that each board terminates
with a sharp point. This poini is six inches lower than the
roof and projects slightly beyond the edge of the roof. The
pointed end of the first rafter at the front of the garage is
at a height of five feet one and three-quarters inches above
the pavement of the alley.

Bluebird Lane is used in the manner in which rear alley-
ways are ordinarily used. Residents of the block drive in
and out of their garages via the alley, and it is generally
used by tradesmen. Telephone poles are placed along the
sidelines and garbage containers commonly stand in the
alley. It has no sidewalks.

Plaintiff had resided in the block approximately six weeks
before she sustained the injury which gave rise to the present
action. On July 15, 1928, at about 3:30 o’clock in the after-
noon, she and her husband and niece had driven out through
the alleyway onto Prospect Street, with the intention of
taking the niece, a visitor from the east, on a sightseeing
drive. Plaintiff observed that their dog, a puppy, was fol-
lowing the car. She testified: ‘‘We stopped, I got out of
the machine, went around and back of the machine to get
the dog; we hadn’t had him very long, he was quite a puppy.
I was the only person he would follow, so I couldn’t catch
him, so I kept on following him along, and jollying him
along, and I ran so he would run with me, and I ran along
the alley with my head down, looking at him.’’ As she was
running along with her eyes focused on the puppy, who was
playfully ‘‘jumping and prancing about”’, she failed to
observe the sharp edge of the first projecting rafter and
“crashed”? into it with great force, causing the injuries
complained of. Plaintiff was five feet nine inches in height
and struck the rafter on her forehead. Her head and neck
were jerked back suddenly with great force. A physician
who treated her testified that the chip fracture of the fifth
cervical vertebra was caused by a sudden hyperextension of
the neck tearing the bone loose from strong ligaments,

The trial court denied defendant’s motion for a nonsuit
made on the ground that the injury was proximately caused
by plaintiff's own negligence, but thereafter found against
plaintiff on this issue. Although denying plaintiff recovery,

188 Le 7

the court found that she had expended $975 for nursing and
medical attention, and that she was further damaged in the
sum of $2,500. The court further found that defendant
could not have anticipated that such an accident would re-
sult from the overhanging eaves,

HI The projecting eaves and rafters constituted an ob-
struction to the alleyway in the nature of a nuisance. By
section 3479 of the Civil Code, and section 370 of the Penal
Code, anything which unlawfully obstructs the free passage
or use, in the customary manner, of any street or highway is
anuisance. No contention is made that Bluebird Lane is not
an alley dedicated to public use. The prohibitions against
unlawfully obstructing public streets and highways apply to
public alleys. (Sec. 2618, Pol. Code; Smith v. Smith, 21
Cal. App. 378 [131 Pac. 890].) | Haves and rafters
which project into a public street at a height between five
and six feet above the strcet constitute a nuisance which the
publie authorities may abate as such. (Secs. 2731-2735,
Pol. Code.)

Hl Although frequently negligence and nuisance coexist,
as where negligent acts’ create a nuisance, a nuisance and
liability for injuries occasioned thereby may exist without
negligence. (Kafka v. Bozio, 191 Cal. 746 [218 Pac. 753,
29 A. L, R. 833]; Snow v. Marian Reality Co., 212 Cal. 622
[299 Pae. 720].) The obstruction in the case herein is per se
a wrongful encroachment on a public street. The court’s
finding that defendant could not have anticipated that an
accident would result from the projecting eaves and rafters
might relieve her were negligence the basis of plaintiff’s
right of recovery, but it does not defeat liability arising from
a condition which constitutes a nuisance irrespective of negli-
gence in its creation or maintenance. In Stockton Automo-
bile Co. v. Confer, 154 Cal. 402, 405 [97 Pac. 881], it is
declared that ‘‘an individual who erects an unlawful obstruc-
tion to the free use of a highway, in its nature a nuisance,
by reason of his wrongful act, is charged in law as an insurer
against accident to a person properly. traveling the highway
and meeting injury by reason of such unlawful obstruction’’,
citing Barry v. Terkildsen, 72 Cal. 254 [18 Pace. 657, 1 Am.
St. Rep. 55]; Colgrove v. Smith, 102 Cal. 220 [36 Pac. 411,
27 L. BR. A. 590]; Spence v. Schultz, 103 Cal. 208 [87 Pac.
220].

— ae 189

[| In the case herein the court holds that the proximate
cause of plaintiff’s injury was her own negligence and failure
to exercise due care for her safety. There are statements in
the decisions of other jurisdictions that contributory negli-
gence is not a defense to an action based on nuisance. This
doctrine seems to have had its origin in certain early New
York eases. As thus broadly stated it has been repudiated
by the New York court of appeals in McFarlane v. City of
Niagara Falls, 247 N. Y. 340 [160 N. B. 891, 57 AL. R.
1]. (See, also, O’Neill v. City of Port Jervis, 253 N. Y.
423 [171 N. E. 694].) In the McFarlane case the plaintiff
stumbled and fell upon a projection from the curb of a
public street, formed when the cement of the pavement
melted and ran. The trial court instructed the jury that
contributory negligence, though proved, would not avail as a
defense. Mr. Justice Cardoza} in writing the opinion re-
versing the trial court, pointed out that although the pri-
mary meaning of nuisance does not involve the element of
negligence as one of its essential factors, situations arise
where what was lawful in its origin may become a nuisance
by negligence in maintenance, as where there is negligence in
eovering a coalliole built under license. Where the nuisance
is of this type, that is, where it has its origin in negligence,
a plaintiff may not avert the consequences of his own con-
tributory negligence. The New York court held that the
condition of the curb constituted a nuisance of this class. It
had its origin in the negligent manner in which the pave-
ment was constructed.

Although the New York court expressly confined its deci-
sion to nuisances having their origin in negligence, for the
reason that nothing more was called for by the facts, the
court was careful to make it plain that in thus limiting its
ruling it did not hold by implication that where the nuisance
was absolute, as in the action brought by Mrs. Curtis, plain-
tiff herein, the negligence of the traveler on the street was of
no account.’ By way of dictum the court suggests that as to
all classes of nuisances the test may be whether plaintiff has
exercised due care to avoid the consequences of the danger.

The question whether failure of the plaintiff to exercise
due care to avoid injury is a defense in an action for per-
sonal injuries resulting from a street obstruction or excava-
tion which constitutes a nuisance, does not seem to have been

190 Po 7

decided in this state, although in several cases the availabil-
ity of the defense is assumed. (Western States etc. Co. v.
Bayside L. Co., 182 Cal. 140 [187 Pac. 785]; Barry v. Ter-
kildsen, swpra, p. 256; Spence v. Schultz, supra, p. 211;
Williams v. San Francisco ete. Ry. Co., 6 Cal. App. 715, 725
[93 Pac. 122]; McKwne v. Santa Clara V. M. & L. Co., 110
Cal. 480 [42 Pac. 980]; Michael v. Key System Transit Co.,
98 Cal. App. 189, 194 [276 Pac, 591]; Meindersee v. Meyers,
188 Cal. 498 [205 Pac. 1078]; County of Alameda v. Tieslau,
44 Cal, App. 332 [186 Pac. 398].) Upon an analysis of
the cases in other jurisdictions cited for the doctrine that
contributory negligence is not a defense to actions based on
nuisance, it will be found that in the main they do not bear
out the proposition that a traveler may recover damages for
injury arising from a street nuisance notwithstanding he has
failed to exercise due care for his own safety.

The statement that contributory negligence is not a defense
has frequently been made where acts of the plaintiff as well
as acts of the defendant contributed to the creation or mainte-
nance of the nuisance. Thus in Bowman v. Humphrey, 132
Towa, 234 [109 N. W. 714, 11 Ann. Cas. 131, 6 L. BR. A.
(N. S.) 1111], the court’s broad statement that the doctrine
of contributory negligence has no proper application to an
action to recover damages for nuisance was applied to a
situation where plaintiff sued to recover damages from de-
fendant for fouling a stream. The court held that the cir-
cumstances that plaintiff was also casting unwholesome mate-
rial into the stream would not defeat his right to recover for
so much of the damage as was fairly attributable to the de-
fendant’s wrong. If wholly independent of plaintifi’s acts
or omissions the effect of defendant’s acts or omissions is to
injure plaintiff, he may recover for such injury. A question
of apportioning the damage is involved in these cases. (See
Correll v. City of Cedar Rapids, 110 Iowa, 333 [81 N. W.
724]; Randolf v. Town of Bloomfield, 77 Iowa, 50 [41 N. W.
562, 14 Am. St. Rep. 268]; Philadelphia & RB. RB. Co. v.
Smith, 64 Fed. 679 [27 L. R. A. 181].) We do not herein
approve the rule of said cases (see Carter v. Chotiner, 210
Cal. 288, 291 [291 Pac. 577]), but merely cite them for
the light they throw on the basis and extent of the doctrine
that contributory negligence is not a defense in actions
founded on nuisance.

, De 191

The cases holding that plaintiff is not under a duty to
minimize the nuisance, as by keeping his windows closed
against. noisome smells, or by filtering polluted water, have
also been cited as involving an application of the rule that
contributory negligence is not a defense, as have the cases
which lay down the rule that a complainant is not barred
from recovery where he purchases property or establishes his
residence in the vicinity of a pre-existing nuisance. (Bow-
man V. Humphrey, supra, and note in 11 Ann. Cas, 134, ap-
pended thereto.)

In our own decision in Kafka v. Bozio, supra, it is held
that in an action to abate a nuisance the fact that plaintiff
has suffered property damage therefrom to which his own
negligence contributed is no defense against the remedy by
abatement, since plaintiff’s negligence gives defendant no
right to continue to maintain a nuisance. It was expressly
stated in that case that this court was not to be understood
as deciding that if plaintiff’s negligence proximately con-
tributed to injure his building it would not be a defense and
bar to an action for damages for such injury.

Cases involving these several applications of the doctrine
that contributory negligence is not a defense in nuisance
actions are collected in a note in 57 American Law Reports
7, appended to the report of the decision of the New York
Court of Appeals in McFarlane v. City of Niagara Fails,
supra, From our examination of the cases therein cited and
others, we are unable to find that there exists, either at
common law or in modern jurisprudence, a well-defined rule
that one who sustains injury from a street obstruction or
excavation which constitutes a nuisance may recover not-
withstanding his failure to exercise due care for his own
safety. Where the nuisance has its origin in negligence, as
where a street curb is constructed and maintained by a city
with a dangerous projection, or where a pile of building
materials or an excavation ercated under license is main-
tained in a negligent and improper manner, McFarlane v.
City of Niagara Falls, supra, the leading case on the subject,
expressly holds that one who sustains injury by reason of
his own failure to exercise due care cannot recover. We
are of the view that the same rule should prevail where the
nuisance is absolute and exists- without regard to negligent
acts or omissions of the defendant. Indeed, there may be

192 | 7

stronger reasons in a given case for relieving the defendant
of liability for injuries to which the plaintiff’s conduct
proximately contributed in the case of an absolute nuisance, *
where defendant is liable although he may have been free
from negligence, than where the nuisance arises from negli-
gent acts or omissions. In the case herein the garage was
already built when defendant acquired the property. The
court found that defendant could not have anticipated that
an accident would result, She alleged in her answer that
she did not know that the eaves projected beyond her prop-
erty line, and this belief is reasonable, especially in view of
the fact that the line of fences and curbs along the alley is
broken and somewhat irregular.

HI Im the appeal in the instant case plaintiff contends
that contributory negligence, if available as a defense in the
action herein, would not bar her recovery on the record pre-
sented. Her contention is that the evidence demonstrates, as
a matter of law, her freedom from contributory negligence.
On this issue the trial court found against her. The court
found that there was no sufficient excuse or reason for her
failure to observe the garage and to avoid striking her head
against the roof thereof. There was testimony of one witness
to the effect that plaintiff had admitted that she struck her
head while in the driveway in front of defendant’s garage
and on defendant’s property, rather than in the alleyway.
But in view of the court’s finding that she struck her head
“while walking and running along said alleyway’’, this testi-
mony must be deemed to have been rejected. Nevertheless,
we are of the view that in the circumstances related, the
question of whether plaintiff was guilty of contributory
negligence was for the jury, or, in the absence of a jury,
for the trial court, and that as an appellate court we cannot
overturn the decision without usurping the function of the
trial court.

HJ he pleadings were sufficient to raise the issue of
contributory negligence. (Hofman v. Southern Pac. Co.,
84 Cal. App. 337, 344 [258 Pac. 397].) Furthermore, where
the plaintiff’s contributory negligence appears from the evi-
dence offered in his behalf, the plea is available to the
defense although not pleaded in the answer. (Hofman v.
Southern Pac, Co., supra; Hoy v. Tornich, 199 Cal. 545, 551
[250 Pac. 565]; Queirolo v. Pacific Gas & Elec. Co., 114

a as 1983

Cal. App. 610, 614 [800 Pac. 487]; Gundry v. Atchison, T. &
S. F. Ry. Co., 104 Cal. App. 753, 762 [286 Pac. 718].)
The judgment is affirmed.

Langdon, J., Waste, C. J., Thompson, J., and Shenk, 5,
concurred,

[Sac. No. 4785, In Bank—February 28, 1934.]

SAM GORDON, Respondent, vy. LEWIS W. COHN et al.
Appellants.

LEWIS W, COHN, Appellant, v. SAM GORDON, Respond-
ent.

Frank M. Hultman for Appellant.
Mervin C. Lernhart for Respondent.

SEAWELL, J.—This appeal involves the ownership of
property not exceeding in value the sum of $150.

194 ee _

Sam Gordon was the owner of a lot in the city of Napa
upon which a one-story trade building was erected. Jack
Fortney was a month-to-month tenant. During his occu-
pancy for a period of something like a year, he covered the
front area of the store with linoleum, amounting to fifty-two
square yards, which was cemented to the pine floor and he
furnished the material for the awning which was attached to
an iron frame set in the front of the building. Said iron
frame was furnished by the owner of the building. It was
fastened to the walls of the building by means of bolts and
screws, and it was made to fit the particular space which it
occupied. Fortney became insolvent in 1930 and assigned
all his property to the secretary of the San Francisco Board
of Trade for the benefit of his creditors. On Auguest 5,
1930, said Board of Trade sold all of his said property,
including the linoleum and awning to Lewis W. Cohn.
Fortney’s lease expired on August 6th. Cohn entered into
possession on that day under a two weeks’ lease which ex-
pired on August 20th. The day before the lease expired
Gordon filed an injunction suit temporarily restraining Cohn
from removing said awning and linoleum from the building,
which Cohn claimed the right to do on the ground that they
were affixed to the premises for the purposes of trade and
domestic use only, and could be removed without injury to
the building. Cohn, in addition to his answer, filed a cross-
complaint, alleging conversion. Said cross-complaint was
thereafter stricken out. No complaint is made of the court’s
order striking out said cross-complaint. On September 19th,
Cohn filed a separate suit for conversion of said property,
based on the same facts which would determine the question
as to whether said property was movable, the solution of
which was also determinative of the ownership of said prop-
erty. The basic facts of the first case being conclusive as
to the rights of the parties in the second action, it was stipu-
lated that the two cases might be tried as one case and only
one judgment need be entered. Judgment went for Gordon
in both cases,

The question as to whether the linoleum and awning
are movable fixtures is the only question in the case. Appel-
lant Cohn (Haskins and Beier being merely agents of Cohn)
bases his claim largely upon a letter written by Gordon’s
attorney to Cohn, dated August 7th, in which said attorney

— | 195

notified Cohn that he was informed that he (Cohn) intended
removing said fixtures from said premises upon the expira-
tion of his two weeks’ lease. In said letter Cohn’s attention
was called to the fact that the linoleum and awning were
affixed to the real property, and while Gordon had no objec-
tion to their removal he insisted that ‘‘such removal be
made without marring, or damaging his property in any
way’’, The letter concluded with the following words:
“The floor, walls and ceiling must be left in the same con-
dition as before the fixtures were installed. In the event
these premises are marred, or in any way damaged by re-
moval of these fixtures, you will be held strictly accountable
in damages.’’ Cohn at no time gave the bond which plain-
tiff insisted he should give for the repair of any damage
which would result from removing said awning and lino-
leum. It is apparent that Gordon was always of the belief
that said linoleum and awning could not be removed with-
out injury to the freehold. In fact it was practically ad-
mitted by Cohn’s expert witness that in some places the
cement would probably have to be chipped from the floor by
a sharp instrument. The question presented is solely one of
fact. If the trial court believed the defendant and his wit-
nesses it would doubtless have decided the issue in defend-
ant’s favor. But, evidently being more impressed by plain-
tiff Gordon and his witnesses and with other matters which
cannot be reproduced for our scrutiny, it decided for plain-
tiff. Where a square conflict of evidence exists, as in this
ease, we are not permitted to substitute our judgment for
that of the trial court. There is ample evidence to sustain
the finding that, in order to remove the cement and the
stains which the laying of the cement upon the floor had
caused, it would be necessary to remove the upper surface
of the floor to the depth of a sixteenth or thirty-second frac-
tion of an inch. While the removal of the surface of the
floor was not great, it was nevertheless a reduction of the
floor thickness and the owner was not required to sacrifice
any part of his building in an effort to restore it to its
former use and attractiveness. As to the awning, defendant
Cohn did not confine his claim to the fabrie portion of the
awning but claimed the entire awning, the framework of
which was furnished by the owner and fashioned to fit the
place it occupied There was evidence to the effect that the

2

bolts and screws if removed would make it difficult, if not
impossible, to refasten another frame to the woodwork from
which said screws and bolts were taken,

The judgment of the court perpetually enjoining the de-
fendant Cohn or his agents from removing said property
from the premises of plaintiff Gordon and further decreeing
that defendant Cohn take nothing against said Gordon is
affirmed.

Shenk, J., Waste, ©. J., Curtis, J.. Langdon, J., and
Thompson, J., concurred.

[Sac. No, 4831, In Bank—February 28, 1984.]

MERCED IRRIGATION DISTRICT, Respondent, v. SAN
JOAQUIN LIGHT AND POWER CORPORATION (a
Corporation), Appellant. .

rE
eS

Thos. J. Straub, W. R. Dunn and F. H. Pearson for Ap-
pellant.

Hugh K. Landram, C, Ray Robinson, Stephen W. Downey
and Downey, Brand & Seymour for Respondent.

THE COURT.—This action was commenced by plaintiff
for declaratory relief involving its asserted rights under a
contract with defendant and, as incidental to that relief,
for a money judgment in the sum of $15,664.50. Judgment
was rendered in plaintiff’s favor and the defendant prose-
eutes this appeal therefrom.

On February 21,-1924, the parties to this litigation entered
into a contract whereby the respondent agreed to erect and
construct a hydroelectric generating plant near Exchequer on
the Merced River ‘‘of about 25,000 kilowatts capacity’? and
the appellant agreed to purchase the electric output thereof
saving and excepting only so much thereof as might be re-
quired in and about the operation of the reservoir and gener-
ating plant. Some time in June, 1926, the plant was placed
in operation. Along in April, 1927, it commenced to pro-
duce in excess of 25,000 kilowatts which continued until
August 1, 1927. The appellant refused to pay for energy
in excess of 25,000 kilowatts output and respondent brought
an action to recover $61,396.23 representing the contract
price of the output in excess of 25,000 kilowatts. The ap-
pellant answered that complaint denying that it had agreed
to purchase any electrical energy from respondent in excess
of an output of 25,000 kilowatt hours, and alleging that re-
spondent had failed to construct a generating plant of
“about 25,000 kilowatts’’, but had constructed in connection
with its reservoir a plant with a capacity far in excess ‘‘of
‘about 25,000 kilowatts’ and of a capacity of at least 82,000
kilowatts’. This cause was tried before a jury which re-
turned a verdict in favor of the plaintiff there, the respond-
ent here. The cause was appealed and the judgment af-
firmed. (Merced Irr, Dist. v. San Joaquin L. & P. Corp.,
101 Cal. App. 153 [281 Pace. 415].)

Subsequent to the judgment becoming final therein and
during the year 1932, the output of the plant was increased

9

so that for seventy-seven consecutive days it generated in
excess of 31,250 kilowatts, and in fact for fifty-two con-
secutive days produced 33,900 kilowatt hours. The appel-
lant has paid for all energy up to 31,250 kilowatts but has
refused: to pay for any in excess thereof. It is respondent’s
contention that in the former action it was determined that
the plant was one ‘‘of about 25,000 kilowatts capacity’”’ and
that appellant is bound to take and pay for the entire out-
put. On the other hand appellant asserts that by the former
decision it was obliged to receive and make payment for all
of the output ‘‘within the maximum figure of 31,250 kilo-
watis’’.

In order to understand more clearly the respondent’s posi-
tion it must be borne in mind that upon the issue in the
former action of whether the respondent here had failed to
erect a plant of about 25,000 kilowatt capacity evidence was
introduced showing it consisted of two generators bearing
the notation on the manufacturer’s label plate ‘‘ ‘15,625
K. V. A. (kilovolt amperes) at 8-10 power factor’ ”’, which
the expert witnesses produced by respondent testified meant
that these units were designed to be ordinarily operated at
eighty per cent power factor allowing the difference as a
safety margin and that, if so operated, they would produce
25,000 kilowatts, but that if operated at full capacity they
would produce 31,250 kilowatts. They also testified in effect
“that, taken together, the two units made up a plant known
to the trade as one of 25,000 kilowatt capacity.

The District Court of Appeal in its opinion said: ‘‘The
vital questions to be determined in the present case are, what
is the maximum capacity of a hydroelectric generating plant
commonly termed a 25,000 kilowatt plant? Was the refer-
ence to a plant of this character a limitation of agreement
to purchase only 25,000 kilowatts, or was it merely deserip-
tive of the general character of a plant, the entire output of
which was bargained for?’’

Again it is said: ‘‘The chief controversy centers around
the application of the words ‘about’ and ‘capacity’ as they
are employed in the contract.’’? Eliminating some language
which does not seem essential here, the court answered the
questions as follows: ‘‘The appellant, which is a public util-
ity corporation engaged in supplying its customers with elec-
trie power and light, and which knew of respondent’s plans

ES 3°

for the construction of the reservoir with a maximum head
of 300 feet must be presumed to have known and contracted
with relation to a variable and not a static head, and that
the output of such a plant would necessarily fluctuate, in a
measure which would be dependent upon the season, the
quantity of water in the storage reservoir and surrounding
conditions. It must also have been deemed to have con-
tracted for the entire output of the plant of 25,000 kilowatts
‘capacity’, with knowledge that the trade commonly referred
to such a plant at eighty per cent only of its possible output,
and that it might be capable of producing 31,250 kilowatts.
The appellant therefore should be required to accept and pay
for the entire actual output of the plant within the maximum
figure of 31,250 kilowatts. It is not disputed that the entire
output for which the judgment in this case was rendered was
within this amount except that for a period of a few days
32,400 kilowatts were produced. This slight excess of 1150
kilowatts over the maximum estimated output of the plant
for a few days only comes within the rule of de minimis non
curat lec and may be included within the definition of the
word ‘about’ as it was used in the contract. (35 Cyc. 206;
23 R. C. L, 1352, sec. 176.) This slight excess is not suffi-
cient variance to defeat the respondent’s claim.

“The foregoing conclusion is based upon the technical
meaning of the phrase which is used in the contract, to wit,
‘a plant of about 25,000 kilowatt capacity’, as it was con-
strued by respondent’s expert witnesses. The word ‘capa-
city’ does ordinarily mean the maximum ability to retain
contents or perform work. But we think this is too narrow
a definition for the purpose of construing the contract in the
present case. It is not unreasonable to assume that the
electrical trade may designate a generating plant by refer-
ence to the approximate load which it is ordinarily designed
to produce with a twenty per cent margin of safety and a
thorough understanding that under favorable conditions its
maximum capacity may be increased to that extent. In the
same sense a vessel is described as one of 5000 tons burden,
or a truck as one of ten tons capacity. A contract to pur-
chase the entire cargo ‘of the first or load of the latter would
not necessarily limit the obligation to the mere figures em-
ployed in the description of thé conveyance.

200 es

‘*While it is ordinarily the province of the court to con-
strue the language of a contract, there are so many scientific
factors involved in determining the kilowatt capacity of an
electric generating plant that it becomes a proper subject
for expert testimony. (United States Heater Co. v. Jenss,
128 Wis. 162 [107 N. W. 293].) It became a question for
the determination of the jury as to whether the term
‘capacity’ was used in its ordinary sense or in a technical
trade sense.’?

“The appellant contends that even though the plant which
was installed by the respondent was originally one of 25,000
kilowatts operated at eighty per cent power factor that
changes were subsequently made by the respondent, includ-
ing the substitution of mica for cotton insulation to permit

* the increase of temperature without burning out the coils; a
two-inch increase of diameter of the waterwheel shafts to
enable them to carry a heavier load, and a cooling system
to lower the temperature of the water in the reservoir, each
of which was designed to increase the maximum capacity
of the plant. The appellant introduced expert testimony
to show that these changes did actually increase the capa-
city of the plant to a maximum output of from 36,000 to
39,000 kilowatts. This testimony was disputed by the re-
spondent, in proof of which contradiction it was pointed
out that the highest output of the plant under most favorable
conditions was but 32,400 kilowatts for a period of only a
few days. It seems immaterial, however, whether changes
were made which actually resulted in the possibility of
increasing the capacity to an amount of energy in excess
of the maximum output of a 25,000 kilowatt plant, so long
as that result was not accomplished, and the appellant is not
asked to accept or pay for electric energy beyond the maxi-
mum product of a 25,000 kilowatt plant. The appellant did
not contract for the output of a specific machine. The qual-
ity or character of the electric energy is not questioned. The
quantity is the only element in dispute. The appellant
merely bargained for a quantity of electric energy equivalent
to the maximum output of a plant of about 25,000 kilowatts,
The appellant is not harmed, nor may it complain if a quan-
tity of electricity less than the maximum amount contracted

SS 2

for was actually generated in a 39,000 kilowatt plant instead
of a 25,000 kilowatt plant. .

“The appellant charges error in the giving and refusing
of certain instructions. Instruction number 7, which is
challenged, was given as follows: ‘You are instructed, there-
fore, that it is your duty to determine whether or not the
power house constructed by the Merced Irrigation District is
of a capacity of about 25,000 kilowatts, and if you so find,
then you must further find that under the provisions of the
contract in evidence, defendant is and was bound to accept
the entire electrical output therefrom.’ This was a correct
declaration of the law. It was a question of fact as to
whether a plant which was capable of producing 31,250
kilowatts per hour operated at unity power factor was in
truth such a 25,000 kilowatt plant as was referred to in
the contract. Upon this point the evidence was conflicting.
Expert witnesses disagreed as to this issue. It therefore
became a question of fact for the jury to determine. There
is no dispute over the fact that if it was a 25,000 kilowatt
plant according to the contract the appellant would be
required to accept and pay for the entire output. Inciden-
tally, it was also the province of the jury to determine
whether the changes which were made in the machinery
had the effect of increasing the kilowatt capacity of the
plant, although the state of the record would seem to make
it immaterial whether the modifications did in fact change
the capacity of the plant, as heretofore suggested.”

Hit cannot be successfully disputed, as is evident from
the foregoing recitals, that the capacity of the respondent’s
generating plant was one of the chief issues in the trial
court as well as one of the principal questions before the
appellate tribunal. The implied finding of the jury based
upon a conflict in the evidence was to the effect that it
was a 25,000 kilowatt capacity plant with a maximum capa-
city of 31,250 kilowatts. The appellate court concluded that
appellant did not contract for 25,000 kilowatt hours, but
contracted for the output of a plant with a maximum capa-
city of 31,250 kilowatts. Further, the jury determined (and
upon conflicting testimony) that the alterations did not in-
erease its capacity, and the appellate court upheld its con-
clusion in this particular. So far, therefore, as the prayer
for declaratory relief is concerned, it would seem that the

202,

issues had heretofore been completely litigated and deter-
mined. Construing the contract of the parties and the
action of the respondent thereunder, it was found that the
respondent had complied by constructing a plant econtem-
plated by the parties and that appellant was compelled to
accept the output thereof to a defined maximum. This case
illustrates the reason for the rule invoked by the appellant
that respondent’s contentions are concluded by the former
judgment. Parties should not be permitted to litigate and
relitigate the same cause of action. The cases are legion
and unanimous to the effect that facts once litigated and the
law once pronounced upon those facts are conclusive in all
subsequent proceedings involving the same subject matter.

| | ‘We should have some doubts upon that phase of the
ease which seeks a money judgment against appellant for
electrical energy already developed in excess of 31,250 kilo-
watts were it not for the language of the complaint. It
reads: ‘‘That defendant accepted delivery of all power gen-
erated and delivered as aforesaid in 1932, up to, but not ex-
ceeding, a maximum of Thirty One Thousand Two Hundred
Fifty (31,250) kilowatts.”’ This allegation puts it beyond
the power of the court to order payment on the theory
that appellant accepted delivery of the excess electrical
energy.

Judgment reversed.

Rehearing denied.
Curtis, J., dissented.

Preston, J., and Langdon, J., deeming themselves disquali-
fied, did not participate in the proceeding on rehearing.

208

[Sac. No. 4830. In Bank—February 28, 1934.]

CLARENCE B. KIMBALL, Respondent, v. PACIFIC GAS
& ELECTRIC COMPANY (a Corporation) et al., De-
fendants; GENERAL ELECTRIC COMPANY (a Cor-
poration), Appellant.

ie
S
a

Charles A. Christin, Carr & Kennedy and John B. Manders
for Appellant.

Jesse W. Carter and Glenn D. Newton for Respondent.

Thos. J. Straub, W. R. Dunn and Fitzgerald, Abbott &
Beardsley, as Amici Curiae on Behalf of Appellant.

THE COURT.—Plaintiff brings this action for personal
injuries alleged to have been suffered by him while working
for the Pacifie Gas & Electric Company as the proximate
result of the negligence of the defendant Dean Wilson, who
at the time of the accident was working for the defendant
and appellant, General Electric Company. In addition to
Wilson and the last-named company, plaintiff joined as de-
fendants the Pacific Gas & Electrie Company and two of
its employees, Milford and Dunwoody. A demurrer of the
Pacific Gas & Electric Company and its employees was sus-
tained without leave to amend, and a judgment of dismissal
entered in their favor. The rights and liabilities of such
dismissed parties are not involved on this appeal. At the
elose of the evidence, the trial court granted a directed
verdict in favor of Dean Wilson on the ground that the
action as to him was barred by the statute of limitations.
The jury brought in a verdict against the sole remaining
defendant, the General Electric Company, in the sum of
$25,000, and that defendant has perfected this appeal.

The facts as shown by the record are as follows: Prior to
March 6, 1928, plaintiff was employed by the Pacifie Gas
& Electric Company as a patrolman and lineman in Shasta
County, California. In connection with this work, plaintiff
worked at the various power-houses operated by that com-
pany in that district. Although there is a conflict in the
evidence on this point, the plaintiff testified that for ten
days to two weeks before March 6, 1928, he had been working
at power-houses other than the Pit Three power-house. On
that date he was ordered by his foreman to perform some

206

work on a relief valve located at the Pit Three power-house.
This valve was situated in a pit in the floor of the power-
house. While plaintiff was in the pit, defendant Dean Wil-
son was working directly above the plaintiff on one of the
large generators. He was carrying large bolts weighing
about twenty pounds each from the generator to a platform
near by. One of these bolts was negligently placed on the
platform by Wilson and, as a result, it rolled off, dropped
about twenty feet, and hit plaintiff on the back of the head,
inflicting the very severe injuries for which this action is
brought. The extent and permanency of the injuries is
conceded by the appellant, and no point is made that the
verdict is excessive. Dean Wilson, for some time prior to
the accident, had been employed by the Pacific Gas & Elec-
trie Company on work somewhat similar to that of plaintiff.
Some time shortly before the accident, the General Electric
Company had been engaged by the Pacific Gas & Electric
Company to adjust and repair the generators at the Pit
Three power-house. An employee of the General Electric
Company, L. A. Fitts, was in charge of this work. Pursu-
ant to agreement between the two companies, certain Pacific
Gas & Electric Company employees were loaned to Fitts to
assist him in his work, the arrangement being that the
Pacific Gas & Electric Company should pay these em-
ployees, and the General Electric Company agreed to and
did reimburse the Pacific Gas & Electrie Company for the
sums so expended. [JJ Defendant Wilson was one of the
loaned employees, and it is conceded that at the time of
the accident Wilson was in fact working for and under the
supervision of Fitts of the General Hlectrie Company. It
follows that the General Electric Compariy as special em-
ployer is chargeable with the negligence of Wilson.
Plaintiff, as already stated, was employed at the time of
the accident by the Pacific Gas & Electric Company. He
testified that he had known Wilson for some time prior to
the accident and knew he was employed by the Pacific Gas
& Blectric Company; that he did not know Fitts, nor did
he know that the General Electric Company was employed in
working on the generators. The plaintiff in fact believed
and, under the circumstances, reasonably believed that, at
the time of the accident, Wilson was working for the Pacifie
Gas & Electric Company and that, since he had been injured

es  _

by a fellow workman he had no cause of action against a
third party.

After the accident, plaintiff was taken to a hospital at
Redding, where a skull operation was performed and where
he remained until about June 1, 1928. During the first part
of this period he was unconscious and during the entire
period his mind was hazy. He was then sent to San Fran-
cisco, where a second operation was performed on his skull.
He tried to return to work in October of 1928 as a watch-
man for the Pacific Gas & Electric Company, and did work
at odd jobs requiring no physical exertion around the power
plant until the fall of 1929. At that time the injury again
caused him to become incapacitated and he again was com-
pelled to undergo hospitalization. He was a patient in
the hospital on several occasions until March of 1930 and,
from that time until the commencement of this action on
July 10, 1930, he has been convalescent. From the fall of
1929 to the trial of this action he has been unable to work
and probably never will be able to do any work requiring
physical effort.

Until June of 1930, plaintiff was totally ignorant of the
fact that he had been injured by an employee of the General
Electrie Company. He accepted compensation under the
Workmen’s Compensation Act from the Pacific Gas & Elec-
tric Company and finally consummated a full settlement of
his compensation claim against that company, which settle-
ment was approved by the Industrial Accident Commission,
in complete ignorance of the fact that he had a cause of
action against the General Blectric Company. At no time
did the Pacifie Gas & Electric Company or the General
Electric Company disclose to the plaintiff or to the Industrial
Accident Commission the fact that plaintiff had been injured
by an employee of the General Electric Company. At no
time did these companies disclose to the plaintiff or to the
Industrial Accident Commission the fact that there was an
agreement between the two companies to the effect that the
General Electric Company should reimburse the Pacifie Gas
& Electric Company for one-half the sums expended by that
company for compensation paid to plaintiff. That this
agreement existed is conceded by appellant and is amply
shown by documentary evidence. That the General Electric
Company ‘had full notice of its legal responsibility towards

208 |

plaintiff is amply shown by the record. Fitts, in charge of
the repair work on the generators for the General Electric
Company, within four days of the accident made a full
written report of the circumstances surrounding the accident
to his company. Shortly after the accident, Fitts came to
San Francisco and made a full personal report of the acci-
dent and the surrounding circumstances to the officers of
the General Electric Company. McCarthy, the claims ad-
juster of the Pacific Gas & Electric Company, advised the
local manager of the General Electric Company in San
Francisco of the accident and of the fact that Wilson was
assisting Fitts at the time. McCarthy also informed the
manager of the General Electrie Company of the amount
expended by his company for the care and treatment of the
plaintiff. The appellant concedes that it entered into the
agreement to reimburse the Pacific Gas & Hlectrie Company
for one-half the sums expended by it on plaintiff’s behalf
and concedes that it in fact did reimburse the Pacific Gas
& Electric Company for one-half the sums expended by it
on plaintiff’s behalf, including one-half the amount of the

* final settlement. The record contains many letters between
the officers of the two companies, setting forth the details
of this arrangement.

From the facts already recited, it is apparent that during
the year immediately following the accident plaintiff’s phy-
sical condition was such that he could not make a full
investigation of the facts of the accident. His wife, how-
ever, did make a determined effort to learn all of the
surrounding circumstances. Shortly after the accident she
wrote to Wilson, asking him to give her all the details.
He replied under date of March 16, 1928, giving the details
as to how he dropped the bolt, but entirely failed to men-
tion the fact that at the time of the accident he was
working for Fitts of the General Electric Company. Wil-
son testified at the trial that at the time of the accident
he knew Fitts was working for the General Electric Com-
pany and that he at that time was working under Fitts’
direction and control, but these facts he failed to disclose
to plaintiff or his wife. Both Wilson and certain officers
of the Pacific Gas & Electric Company called on plaintiff
while he was in the hospital in Redding, but, although they
fully discussed the accident, they remained entirely silent

es _(!

as to the General Electric Company’s connection therewith.
Shortly after the accident, Mrs. Kimball taked with the
manager of the Shasta Division of the Pacific Gas & Electrice
Company and, although he freely discussed the details of
the accident, he did not mention that Wilson was at the
time of the accident employed by the General Electrie Com-
pany. Mrs. Kimball had three or four talks with McCarthy,
claims adjuster of the Pacific Gas & Electrie Company,
about the accident. McCarthy had full knowledge of the
details of the accident and of the General Electric Com-
pany’s legal responsibility therefor. It was he, in fact, who
carried on the negotiations with the General Electric Com-
pany for a settlement of his company’s claim against the
General Electric Company. In spite of this fact, he at no
time mentioned to Mrs. Kimball or to plaintiff, Wilson’s
relationship with the General Electrie Company, or the ar-
rangements between the General Electrie Company and the
Pacific Gas & Electric Company in reference to the accident.
Plaintiff first gained the information as to the true facts
in reference to the accident early in June of 1930, under
rather curious circumstances. At that time, he was visiting
the Volta Club House of the Pacific Gas & Blectrie Com-
pany and, on a desk in that club house, found a letter from
McCarthy to the auditor of the Pacific Gas & Electric Com-
pany, which letter fully set forth the facts as to the accident
and the facts as to the agreement between the two com-
panies for the sharing of the expenses. Plaintiff imme-
diately took this letter to his attorney and this action was
commenced about a month thereafter. The period between
the date of the injury and the date of the commencement
of the action was two years and four months. Appellant
pleaded and on this appeal relies on the statute of limita-
tions, section 340, subdivision 3, of the Code of Civil Pro-
cedure, providing a one-year period of limitations in such a
ease. Plaintiff’s complaint is based on the theory that appel-
lant fraudulently concealed the cause of action from him
and he contends that such fraudulent concealment tolls
the statute of limitations. It is to be noted that the action
here involved is a simple one for personal injuries based
on negligence and that fraud is no part of the original
action. On the threshold of this appeal we are met by the
. question as to whether the fraudulent concealment of the
De

0

facts upon the existence of which the cause of action depends
tolls the statute of limitations in an action based on negli-
gence. For the purposes of this part of the opinion we will
assume that the complaint adequately alleges the fraudulent
concealment and that the evidence supports the allegations.

HH It is the contention of appellant that the statute of
limitations in this state, in cases of fraudulent concealment,
can be tolled only in actions in equity and those where
fraud is the basis of the original cause of action. This
last contingency is expressly provided for by section 338,
subdivision 4, of the Code of Civil Procedure. Appellant
strenuously contends that the fraudulent concealment by
the defendant of the facts upon which a tort or negligence
action depends does not toll the statute. We agree with
appellant that the three-year period provided for in section
338, subdivision 4, of the Code of Civil Procedure, applies
only where fraud is the gravamen of the original action.

We are of the opinion, however, that independent of
statute, a fraudulent concealment by the defendant of the
facts upon which a legal common-law action is based, under
the proper circumstances, tolls the statute until discovery
and that upon discovery the statute applicable to that.
particular action (in this case sec. 340, subd. 8, of Code
Civ. Proc.) then commences to run. There are cases from
other jurisdictions, many of which are cited by appellant,
which hold that in the absence of a statutory exception,
the fraudulent concealment of the fact upon which the
cause of action accrues does not toll the statute, but, in
our opinion, the cases in this state and the weight of au-
thority elsewhere support the rule that under such circum-
stances the statute is tolled. (See 87 Cor. Jur. 972, sec. 353,
where many cases are collected.)

The earliest case discussing the problem in this state is
Kane v. Cook, 8 Cal. 449, decided in 1857. This was a
legal action in assumpsit based on defendant’s failure to
remit to the plaintiff the proceeds of the sale of certain goods
belonging to plaintiff and consigned to defendant. The de-
fendant fraudulently concealed the fact of the sale from
the plaintiff until after the statute of limitations’ period
provided for such actions had expired. Mr. Justice Field
rendered the opinion of the court. He pointed out that
defendant’s action in failing to render an account of the sale

Ss

to plaintiff kept the plaintiff in ignorance of his rights
and that to hold that the statute of limitations runs under
such circumstances would be to permit the defendant to take
advantage of his own wrong. At page 458, the court states:
“Statutes of Limitation are passed to prevent the production
of stale claims, when, from the lapse of time, it has become
difficult or impossible to furnish the requisite proof to de-
feat them. They proceed upon the theory that the delay,
for a fixed period, to assert one’s claim raises a presump-
tion of settlement, and that a party ought not to be after-
wards harassed respecting it. They are not intended to
protect a party who has by fraudulent concealment delayed
the assertion of a right against him until after the expiration
of the period limited by the statute... .

“The question whether a fraudulent concealment of the
fact, upon the existence of which the cause of action accrues,
would avoid the Statute of Limitations, has frequently arisen,
and in its decision there is much conflict of opinion. In
Courts of Equity it is the settled doctrine that such con-
cealment will prevent the operation of the statute, and it is
only in the application of the doctrine to suits at law that
the diversity of opinion exists.”? The court then reviews
many cases from other jurisdictions and then concludes its
opinion with this observation: ‘‘In this diversity of opin-
ion on the question, we are free to adopt that rule which
will best tend to advance justice, and prevent the perpetra-
tion of fraud; and we therefore hold, that in all cases a
fraudulent concealment of the fact, upon the existence of
which the cause of action accrues, is a good answer to the
plea of the Statute of Limitations... .In the present
case, the plaintiffs are residents of New York; they looked
to their consignee in California to acquaint them of the
sale of their goods; his delay of three years to impart any
information, cannot be reconciled with honest intentions,
but necessarily leads to the conclusion, that the sale was
concealed for a fraudulent purpose.’’? It is to be noted
that in this case fraud was not the gravamen of the original
action, but that the fraud consisted of the concealment of
facts upon which the cause of action acerued. It is also to
be noted that the statute of limitations then in effect was
almost identical with the present statute, and that there

2

was no statutory exception based on fraudulent concealment.
The court, however, read into the statute such an exception.

Another very enlightening case is Lightner Min. Co. v.
Lane, 161 Cal. 639 [120 Pae. 771, 775, Ann. Cas. 1913C,
1093]. This was an action for damages caused by an under-
ground trespass. The court exhaustively cites the cases on
both sides of the question here involved and expressly fol-
lows Kane v. Cook, supra. The court does hold that
such a trespass by its very nature is secret and tinged with
fraud, and, therefore, did indicate that the original cause
of action was tainted with fraud, but the court does not
solely rest its decision on that ground. The court first con-
eedes the rule to be that in actions at law the plaintiff's
mere ignorance of the existence of the injury, or of the
facts constituting such injury, or of the identity of the
person liable therefor will not toll the statute. It is on
this ground that the court distinguishes many of the very
cases relied on by appellant in the present case. The court
then cites almost a full page of authorities holding both
ways on whether fraudulent concealment by the defendant
tolls the statute and quotes with approval from Kane v.
Cook, supra, and holds that said case decided that very
point in this state in favor of tolling the statute. In dis-
eussing Kane v. Cook, the court stated: ‘The statute then
in force contained the provision now found in subdivision 4
of section 338 concerning actions for relief against fraud,
but the decision was not avowedly based upon that pro-
vision, nor was it referred to. It was put upon the general
ground that the rule was applicable to any statute of limita-
tions, although not containing any express exception in
relation to fraudulent concealment. The statutes of limita-
tions have been re-enacted without change since the decision
was made. The familiar rule is that when there is a re-
enactment of a statute in the same language, after a con-
struction by the courts, the new statute is presumed to
be intended to have the same effect as that previously given
to its predecessor.’? Appellant contends that the rule of
the Lightner case is limited to cases where fraud is the
gravamen of the original action. There is language in the
opinion tending to uphold this contention. The court did
emphasize that such an underground taking by its very
nature is secret and tinged with fraud, but in our opinion

es

the gravamen of the action was the taking, whether fraudu-
lent or not, and the real fraud was in the concealment. As
we read the opinion, the court did not base its opinion solely
on the provisions of section 338, subdivision 4, of the Code
of Civil Procedure, but, as an alternative ground of the
opinion, held that fraudulent concealment constitutes an
implied exception to the statute. The unequivocal approval
of the holding in Kane v. Cook, supra, to the effect that
“in all cases a fraudulent concealment of the fact upon
the existence of which the cause of action accrues is a good
answer to the plea of the Statute of Limitations’, indicates
what the real holding in the Lightner case was. Moreover, it
should be noted that in Consolidated Reservoir & Power Co.
v. Scarborough, 216 Cal. 698, at page 706 [16 Pac. (2d) 268],
this court recognized that in the Lightner case ‘‘the grava-
men of that action was an underground trespass upon plain-
tiff’s mine’, a purely legal action not necessarily tainted
with fraud.

[| Appellant refers us to several California cases which
it contends announce a contrary rule. Most of these cases
simply hold that in actions at law plaintiff’s mere ignorance
of the existence of the injury, or of the facts constituting
such injury, or of the identity of the wrongdoer, does not
toll the statute. Such was the holding in Lambert v.
McKenzie, 135 Cal. 100 [67 Pac. 6], Lattin v. Gillette, 95
Cal. 317 [80 Pac. 545, 29 Am. St. Rep. 115], Gale v. Mc-
Daniel, 72 Cal. 334 [18 Pac. 871], and Harding v. Liberty
Hospital Corp., 177 Cal. 520 [171 Pac, 98], relied on by
appellant. These cases are not in point, inasmuch as they
did not involve a fraudulent concealment by the defendant
of the facts giving rise to the cause of action. In fact,
the first three of these cases were distinguished on that very
ground in the Lightner case, supra (161 Cal. at p. 696).
The only case from this state cited by appellant at all in
point is Johnson v. Nolan, 105 Cal. App. 298 [288 Pac. 78],
a case in which no hearing was asked in this court. This
was a malpractice case. In his first complaint, the plaintiff
had pleaded the date of the alleged injury, so that the com-
plaint showed on its face that it was barred by the statute
of limitations. In his fourth amended complaint, the plain-
tiff omitted the date. The defendant demurred generally
and specially and such demurrer was sustained by the trial

2

court. The appellate court held that with the date omitted
the special demurrer was good and that if the date had been
inserted the general demurrer would have been good. The
court further held (p. 294): ‘In a further attempt to
avoid a plea of the statute of limitations the plaintiff inserted
certain allegations pleading that the defendant concealed
from him certain facts regarding the plaintiff’s case. How-
ever, this is not dn action in equity, but is an action in mal-
practice. The statute of limitations which is applicable is
subdivision 3 of section 340 of the Code of Civil Procedure.
(Harding v. Liberty Hospital Corp., 177 Cal. 520, 522 [171
Pac. 98].) Within the period of time so specified in that
statute it was the plaintiff’s duty to ascertain at his peril
whether he desired to maintain this action. In Lattin v.
Gillette, 95 Cal. 317, at page 320 [29 Am. St. Rep. 115, 30
Pae. 545, 546], the court quotes with approval from Wood
on Limitations as follows: ‘Where an attorney is sued for
malpractice, the cause of action arises from the time when
such malpractice occurred, and that without any reference
to the circumstance whether the client knew the fact or not.’
Continuing, the court cites many other authorities to the
same effect. We find no error in the record.’’ Of course,
the rule is well settled that in a malpractice case the statute
starts to run from the date of the injury and that mere
ignorance of his injury on the part of the plaintiff is not
sufficient to toll the statute. That is all that was held by
the eases cited by the District Court of Appeal in its
opinion. The District Court. of Appeal apparently over-
looked the cases heretofore cited in this opinion holding
that a fraudulent concealment by the defendant of the facts
upon which the action depends tolls the statute. It is not
clear from the appellate court’s opinion just what the
facts were that were concealed by the defendant. If the facts
alleged to have been fraudulently concealed were the facts
“wpon which the cause of action accrued, and if those facts
were properly alleged, then the decision is contrary to Kane
v. Cook, swpra, and contrary to the theory of the Lightner
ease, supra, and is hereby disapproved.

No good purpose would be served in reviewing the cases
from other states. (See, however, Texas & Pac. Ry. Co. v.
Gay, 88 Tex. 111 [80 8. W. 543], and Waugh v. Guthrie
Gas, Light, Fuel G Imp. Co. 87 Okl. 239 [181 Pac. 174,

SS

L. R. A. 1917B, 1253], where the courts there involved
held that the statute was tolled in a personal injury action
by a fraudulent concealment by the defendant, and where
the cases are exhaustively collected. We, therefore, hold
that the better view and the one supported by the cases in
this state and by the weight of authority elsewhere is that as
far as a legal action for personal injuries is concerned, the
fraudulent concealment by the defendant of the facts upon
the existence of which the cause of action depends tolls the
statute, and such statute does not begin to run until the
discovery by plaintiff or until by reasonable diligence the
plaintiff should have discovered the facts.

Hl We turn now to a discussion of the second main point
urged by appellant, and that is that the complaint herein
does not allege such a fraudulent concealment as to state
a case wherein the statute should be tolled. Although this
is not a case falling within the provisions of section 338,
subdivision 4, of the Code of Civil Procedure, we think
that the same rules of pleading should apply and the same
particularity should be required as is necessary to bring
that section into operation. The cases under that section
are quite numerous, and have firmly established the rules
applicable to such cases. One of the leading cases on the
subject is Lady Washington C. Co. v. Wood, 118 Cal. 282
[45 Pac. 809]. (See, also, Victor Oil Co. v. Drum, 184 Cal.
226 [198 Pac. 243]; Original Min. & Mill Co. v. Casad, 210
Cal. 71 [290 Pac. 456, 457]; Consolidated Reservoir &
Power Co. v. Scarborough, 216 Cal. 698 [16 Pac. (2d) 268].)
In Original Min. & Mill. Co. v. Casad, supra, the court,
after citing and quoting from the leading cases on the
subject, summarized the rules applicable to such pleading
as follows: ‘‘It will be discovered upon an analysis of the
above cases that there are three major allegations that must
be contained in the complaint before it will be held sufficient :
1. The complaint must allege when the fraud was discovered’;
2. The circumstances under which it was discovered and,
8. Facts must be alleged to show that plaintiff is not at
fault for failing to discover the fraud sooner, and that the
plaintiff has no actual or presumptive knowledge of facts
sufficient to put him on inguiry.”” [J There can be no
doubt that plaintiff herein has adequately pleaded the
necessary facts in reference to requirements 1 and 2

0

above. enumerated. As to requirement number 3, it is our
opinion that the complaint is sufficient. Paragraph VI of
the amended complaint alleges plaintiff’s ignorance of his
cause of action and his inability to have sooner ascertained
the true facts as to the liability of the General Hlectric
Company. Paragraph VII alleges that the Pacific Gas &
Electric Company furnished plaintiff with medical treat-
ment and paid him compensation, and that at all times that
company advised plaintiff that it was responsible for the
accident and held itself out to plaintiff as responsible
therefor, when, in truth, said company knew that the Gen-
eral Electric Company was responsible therefor. Para-
graph IX alleges, on information and belief (the facts be-
ing peculiarly within the knowledge of appellant, such form
of allegation is of course sufficient) that the General Elec-
iric Company, well knowing its responsibility to plaintiff,
fraudulently and deceitfully agreed with the Pacific Gas &
Electric Company that if the facts in reference to plain-
tiff’s cause of action against the General Electrie Company
were concealed from plaintiff, so that plaintiff could not
hold the General Electric Company responsible therefor,
then the General Electric Company would pay one-half of
the amount expended by the Pacific Gas & Hlectrie Com-
pany on plaintiff’s case; that thereafter the General: Elec-
trie Company did pay that sum to the Pacifie Gas &
Hlectric Company. Paragraph X alleges that, as a result
of such fraudulent concealment perpetrated by defendant,
plaintiff had no knowledge of his cause of action until the
discovery of the letter above referred to, which letter is
pleaded in haec verba in paragraph V of the amended com-
plaint. The amended complaint, in some detail, alleges the
inquiries made by plaintiff of the employees of the Pacific
Gas & Blectric Company, and of Dean Wilson, the em-
ployee of the General Electric Company, and alleges that
such persons fraudulently withheld from plaintiff the in-
formation as to the General Electrie Company’s responsi-
bility for the accident. In the very nature of the case that
is all the plaintiff could plead. The facts were all within
appellant’s knowledge. We think that these allegations,
when read as a whole, sufficiently comply with the rules of
pleading applicable to such eases.

Re

HM The last important contention of appellant is that
the evidence does not show fraudulent concealment of the
character necessary to toll the statute. We think that the
facts already recited in this opinion are a complete answer
to appellant’s contention that the evidence does not show a
fraudulent concealment. In this connection, we are par-
ticularly impressed by the fact that appellant concedes
agreeing to reimburse the Pacifie Gas & Electric Company
for one-half the sums expended by the latter company on
plaintiff’s behalf, and concedes that it actually did reim-
burse that company in that amount, and that all of the
negotiations in reference thereto were kept strictly secret
and not disclosed either to plaintiff or to the Industrial
Accident Commission. We think that there was no duty
on either company to volunteer the facts of the accident
to plaintiff, but we think that when they began to nego-
tiate between themselves as to the settlement of the claim,
a positive duty existed to disclose those negotiations to
plaintiff. Mere silence on the part of the two companies
would not constitute, under well-settled principles, a
fraudulent concealment, but when negotiations took place
as to a settlement of the claim, a positive duty to disclose
arose. In this connection, the provisions of section 26 of
the Workmen’s Compensation Act are pertinent. By the
terms of that section, under the circumstances disclosed in
the record before us, the Pacific Gas & Electric Company,
as plaintiff’s employer, was entitled to recover by action
from appellant, as the tort-feasor responsible for plain-
tiff’s injuries, every dollar of expense incurred by it in
caring for plaintiff. No such action was begun. If such
an action had been begun, it would have fully disclosed
to plaintiff appellant’s connection with the accident. That
section also provides that, if the employer in such an action
shall recover in excess of the amount expended by it, such
excess shall belong to the employee. The section expressly
-provides that ‘‘no release or settlement of any such claim
for damages under this section shall be valid without the
written consent of both the employer and employee’’.

We think that under this section, when the Pacific
Gas & Electric Company started negotiations with the Gen-
eval Electric Company for a settlement of its claim, a
positive duty existed on the part of the Pacific Gas & Hlec-

218

trie Company to inform plaintiff of the negotiations. This
it failed to do. It likewise failed to notify the Industrial
Accident Commission of any of these facts when it com-
promised, with the commission’s approval, plaintiff’s claim
against it. In thus keeping concealed from plaintiff the
facts as to the accident, under the circumstances here dis-
closed, we think the jury was justified in inferring that
the two companies were acting in concert and that a tacit
agreement existed between them that the liability of the
General Electric Company should be kept concealed. More-
over, the record shows that the General Electric Company
was fully advised of what the Pacific Gas & Electric Com-
pany was doing, and, by reason of the privity of contract be-
tween them, it may be reasonably inferred that the General
Electric Company ratified and approved what the Pacific
Gas & Electric Company was doing.

On the oral argument, appellant referred us to the case
of Maryland Casualty Co. v. Fidelity etc. Co., 71 Cal. App.
492 [236 Pac. 210]. It is appellant’s contention that, if
the rules of law enunciated in that case be applied to the
facts of the instant case, the judgment must be reversed.
In that case, plaintiff was the insurance carrier of a cer-
tain employer. One of the employees of that company was
injured in the course of his employment and he was there-
upon sent to a hospital at plaintiff’s expense. While there,
the hospital attendants negligently aggravated the injury,
resulting in delaying the employee’s recovery and resulting
in the plaintiff expending an additional thousand dollars
on the employee’s behalf. The defendant is the insurance
carrier of the hospital. The defendant agreed with the
plaintiff that it would reimburse plaintiff for this extra ex-
penditure if plaintiff would not inform the injured em-
ployee of the injury caused by the negligence of the hospital
attendants. The plaintiff agreed to this arrangement. This
action was brought upon that promise of reimbursement.
The injured employee was not a party to the action and was.
not complaining. The defendant’s defense was that the
agreement was illegal and void, being against public policy.
The appellate court held it was not and this court, two of its
justices dissenting, denied a hearing. The basis of the ap-
pellate court’s opinion was that the insurance carrier of the
employee’s employer was not in a position of trust toward

ee ee

the employee. The appellate court emphasized the fact
that the employee was not before the court and not com-
plaining. The appellate court was evidently of the opin-
ion that neither the employer nor his insurance carrier was
Jiable to the employee for the extra expense caused by the
‘negligence of the hospital attendants, and for that addi-
tional reason no duty to disclose the facts to the employee
existed on the part of the insurance carrier. All of these
factors serve to distinguish clearly that case from the in-
stant one. Here the employer and not his insurance car-
vier was a party to the concealment; here the employee is
the complaining party and here the employer was clearly
responsible for caring for the plaintiff. Moreover, the ap-
pellate court did not mention section 26 of the Workmen’s
Compensation Act. An additional reason why the Maryland
Casualty case, supra, is not in point is that in that case
there was no misleading of the employee by the telling to
him of half-truths, as is the fact in the instant case. In
the present case, although Wilson, a General Electric Com-
pany employee, McCarthy, Milford and other Pacifie Gas &
Electric Company employees talked freely with the plain-
tiff and his wife about the accident, every one of them
carefully concealed the fact, which they well knew, that
Wilson was working for the General Electric Company at
the time of the accident. In this connection, it is well to
keep in mind the elementary principle set forth in 12 Rul-
ing Case Law, p. 310, section 71, as follows: ‘‘Even though
one is under no obligation to speak as to a matter, if he
undertakes to do so, either voluntarily or in response to
inquiries, he is bound not only to state truly what he tells
but also not to suppress or conceal any facts within his
Imowledge which will materially qualify those stated. If
he speaks at all he must make a full and fair disclosure.
To tell half a truth has been declared to be equivalent to
the concealment of the other half. A partial and fragmen-
tary disclosure, accompanied by the wilful concealment of
material and qualifying facts, is not a true statement, and
is as much a fraud as an actual misrepresentation, which,
in effect it is. Therefore, if one wilfully conceals and sup-
presses such facts, and thereby leads the other party to be-
lieve that the matters to which the statements made relate

220 |

are different from what they actually are, he is guilty of
a fraudulent concealment.’

We think that the evidence clearly supports the infer-
ence that the appellant agreed with the Pacific Gas & Elec-
trie Company to keep the facts from plaintiff, and we are
further of the view that such an agreement, under the’
facts of this case, constituted a fraud on plaintiff.

The other contentions made by appellant are so unsub-
stantial as not to require further comment.

The judgment appealed from is affirmed.

Rehearing denied.

Preston, J., and Langdon, J., deeming themselves dis-
qualified, did not participate in the proceeding on rehear-
ing.

[Crim. No, 8713. In Bank.—February 28, 1934.]

THE PEOPLE, Respondent, v. FRED HAYES et al,
Defendants; WILLIAM DULIN, Appellant.

221

J. P. Guerin and A. H. McConnell for Appellant William
Dulin.

U. S. Webb, Attorney-General, and James 8. Howie,
Deputy Attorney-General, for Respondent,

THE COURT.—A hearing was granted in this ease, after
decision by the District Court of Appeal, Second Appellate
District, Division Two, in order to give full consideration
to the contention of appellant Dulin that the verdict as to
him was contrary to the evidence. Upon a careful exami-
nation of the whole record, we have reached the conclusion
that the evidence was sufficient to sustain the verdict. We
therefore adopt the opinion of Mr. Justice pro tem. Archbald
as the opinion of this court. It reads as follows:

222 as a

“Appellant and Fred Hayes were jointly charged with
the murder of Mickey Erno, by an information filed on
February 23, 1933. Both were found guilty of murder in
the first degree, with recommendation of life imprisonment.
From the judgments of conviction entered on said verdict
and from the orders denying their respective motions for
a new trial both defendants appealed. Subsequently, on
motion of the attorney-general, the appeal of Hayes was
dismissed and the judgment and order appealed from by
him were affirmed under section 1253 of the Penal Code.

“Appellant Dulin urges (1) that the verdict is contrary
to the evidence, (2) that the court misdirected the jury in
matters of law, (3) that the court erred in giving as well
as in refusing certain instructions, and (4) in refusing to
grant him a new trial on the ground of newly discovered
evidence.

“The evidence shows that a body was found at about
9:50 p. m. of January 17, 1933, from five to ten feet from
the north end of a bridge located on East Spring Street,
about one mile west of the town of Los Alamitos and three
or four miles east of Long Beach. It was identified as
the body of Mickey Erno and was still warm when found.
Erno died as the result of gunshot wounds.

“*(1) Appellant contends that the evidence fails to con-
nect him with the murder charged. Without going into
the evidence in detail, it is sufficient to say that the jury
might well conclude therefrom that some time before the
murder two men, one of whom was a friend of appellant
for several years, brought a diamond ring to defendant
Hayes to be disposed of; that Hayes gave it to Erno for
disposition and that Erno and one ‘Socks’ Brewer borrowed.
or raised a sum of money thereon and divided it between
themselves; that Hayes thereafter spent some time looking
for the ring and Brewer. That Dulin was interested with
him appears from the testimony of the witness Mrs.
Proctor, who went to Dulin’s apartment the afternoon of
the day of the murder to find Hayes, to see ‘if he had
gotten Mickey’s [Erno’s] car’. ‘Then, said she, ‘we drifted
into a conversation about them using the car to find Socks,
and they was trying to locate him on account of the ring.’
Dulin said he ‘didn’t like the way things were going’, and
‘I told him that I knew Mickey was trying to find him

— a 223

[Socks] ... right away’ and that Mickey ‘had been awful
eross since this thing had come up’; that Dulin said there
was ‘something crooked about the ring’ and that ‘he
didn’t know what it was, didn’t like the way Mickey was
acting’, and ‘asked me if I cared if he [Erno] went away’.
The evidence shows also that Hayes, Dulin and Erno were
together in Dulin’s apartment from about 6:30 to about 8
o’clock the night of the murder, at which time one Josephine
Bauer, who was there to meet a marine named Jess Holder,
was taken by Hayes in Mrs. Proctor’s car, which she
brought over at the request of Hayes, to a street car, on
which Mrs. Proctor and Miss Bauer went to the Ritz Hotel,
conducted by Mrs. Proctor; that prior to that time a woman
called ‘Nell’, who lived with Dulin, was taken to the home
of Dulin’s mother; that Jess Holder found the three in
Dulin’s apartment when he arrived at about 7 o’clock p. m.;
that he stayed twenty minutes or so and then left, Dulin
giving him his key to the apartment, telling him to use it if
he came back; that when Holder returned at about 9 o’clock
p. m, he found a note telling him that Miss Bauer was at
the Ritz Hotel. From the foregoing circumstances the jury
could only conclude that the three men were left in the
apartment and that Mrs. Proctor’s car was in the street for
their use. Hayes and Dulin appeared at the Ritz Hotel
shortly after 10 o’clock. Hayes, a nervous individual and
evidently more nervous than usual, came in first and then
called Dulin in. Miss Bauer was taken by the two to
Dulin’s mother’s home, where ‘Nell’ put on her coat and
went with the men to the Dulin apartment. The following
Saturday evening Dulin came to Mrs. Proctor’s and wanted
to know if she was ‘for Shorty’ (Hayes), who had been
placed under arrest. He told her they were trying to get
a car to go down to see Jess Holder at San Diego, to ‘prove
an alibi’—prove that ‘Shorty’ was with Jess, spending the
evening in question at ‘speakeasies’. At that time, Mrs,
Proctor testified, she said to Dulin: ‘Well, Bill, I would
rather you told them that you boys had my car; and he
said, ‘‘No, don’t tell them we had your car. Don’t tell
them about your car.’’ I said, ‘‘Well, if Shorty pleads
guilty he will tell them that he had my ear,’”’ and he said
“Shorty will never plead guilty. He will never talk... .
I kept on insisting that they should tell them they had my

224 | 7

car that night. Q. What night? A. On the night of the
17th” the night of the murder. In addition to the fore-
going, some cartridges were found in a vest belonging to
Dulin, which corresponded in caliber, and the lead bullets
as to color and character of grease in the cannelures, with
those taken from Erno’s body.

“Without going further into the evidence we will
say that in our opinion it sufficiently connects appellant
with Hayes and Erno at the time the murder must have
been committed, and supports the conclusion that, believing
Erno had ‘double crossed’ them in the disposition of the
ring they evened things up in their own way. The jury
having determined the facts in the first instance by their
verdict, which was approved by the trial judge when he
denied the motion for a new trial, we cannot set it aside on
appeal on the ground urged here, unless it clearly appears
that upon no hypothesis whatever is there substantial evi-
dence to support such conclusion. (People v. Tom Woo,
181 Cal. 315 [184 Pace. 389].) We cannot so conclude, after
a careful examination of all the evidence.

HM ‘‘(2) Im view of the evidence in this case we see
no error in giving the instruction to the effect that all
persons concerned in the commission of a felony, whether
they directly commit the act or merely aid and abet its
commission, can be prosecuted, tried and punished as prin-
cipals. If there had been no evidence tending in the
slightest degree to establish a confederation between Hayes
and Dulin to do the act it would have been error to give
such instruction. (People v. Silva, 48 Cal. App. 728 [192
Pae, 330].) . .

Hi “*(3) Appellant complains of the refusal of the court
to give a requested instruction to the effect that the burden
of proving the presence of himself at the scene of the
murder devolved upon the prosecution, and that the burden
was not upon him to prove that he was not there. In our
opinion such requested instruction conflicts with sections
81 and 971 of the Penal Code, stating (a) who are princi-
pals and (b) abrogating the distinction between an acces-
sory before the fact and a principal in felony cases, re-
spectively. The court properly instructed the jury as to the
burden of proof, the presumption. of innocence and reason-
able doubt, and in our opinion the instruction requested was

— es 225

properly refused. J And in view of what we have
heretofore said, no error was committed in refusing to direct
a verdict in favor of appellant.

HE ‘‘(4) On the motion for a new trial the affidavit
of defendant Hayes was presented as newly discovered evi-
dence. In this affidavit Hayes in effect assumed all re-
sponsibility for the perpetration of the murder, stating
that he killed Erno on the bridge and then dropped the
pody over the side. There were counteraffidavits from
which the court could well conclude that this latter state-
ment was impossible. The court also heard all the evidence,
including that of Hayes, and was justified in ruling that the
result of the trial could not have been changed if Hayes
had so testified instead of telling the story he did. We see
no abuse of discretion in denying the motion.’’

Judgment and order affirmed.

[Sac No. 4803, In Bank—February 28, 1934]

C, A. STOTTS, Respondent, v. CHARLES W. BLICKLE,
Appellant.

—
ee

no
ix)
a

Butler, Van Dyke, Desmond & Harris, Gerald Desmond
and Irving D. Gibson for Appellant.

C. C. MeDonald for Respondent.

Cooley, Crowley & Supple, W. I. Gilbert, Redman, Alex-
ander & Bacon, Donahue, Hynes & Hamlin, Bronson, Bron-
son & Slaven, Neumiller & Ditz, Myrick & Deering and
Scott, Hadsell, Sweet, Ingalls & Lamb, Brown, Ledwich &
Rosson and Crosby & Crosby, as Anvict Curiae on Behalf of
Appellant.

" Qullivan, Roche, Johnson & Barry and Jesse W. Carter, as
Amici Curiae on Behalf of Respondent,

LANGDON, J.—This is an action by the father of a
minor to recover for the wrongful death of said minor.
The deceased, a child nine years of age, was a guest in an
automobile driven by defendant, his uncle. The accident
occurred on May 17, 1931. At that time section 14134 of
the California Vehicle Act provided that an action based
upon injuries or death of a guest in a motor vehicle could
be maintained upon a showing of ‘‘intoxication, wilful mis-
conduct or gross negligence’? of the operator. Plaintiff

— a 227

alleged gross negligence and presented evidence in support
of the allegation, which resulted in a verdict im his favor.

HI The evidence shows that on the morning of the
accident, defendant drove from Woodland to Sacramento,
observing that the car did not steer properly. On the way
pack to Woodland, in the afternoon, he felt drowsy and
tired, as a result of lack of sleep the previous night. The
car was still behaving erratically, one wheel occasionally
leaving the paved portion of the highway. At about 5
P. M. he was driving along a clear highway, about thirty
miles per hour, when suddenly the car left the pavement
and for about one hundred and fifty feet was off the road,
until it struck a power pole located about seven and one-
half feet from the edge of the highway. Defendant did
not apply the brakes, and made no attempt to turn the
ear back to the road. The deceased’s mother, sitting in
the back, called to him twice. He apparently did not hear
the first call, but at the second he swerved the car and
struck the pole a glancing blow which threw the deceased
out of the car and killed him. Defendant’s declarations and
testimony, together with the foregoing circumstances, estab-
lished by several witnesses, justified the inference that he
dozed off at the time of the accident. This, coupled with
his failure to repair the car at Sacramento, makes out a
sufficient case of ‘‘failure to exercise slight care’’, or gross
negligence. A very similar case is Malone v. Clemow, 111
Cal. App. 18 [295 Pac. 70]. See, also, Kastel v. Stieber,
215 Cal. 87 [8 Pac. (2d) 474].

HI Defendant urges, however, that plaintifi’s cause of
action for gross negligence has been abated by the amend-
ment of the statute in 1931, subsequent to the accident,
which eliminated the words ‘“‘gross negligence’? and re-
stricted recovery to cases of intoxication or wilful mis-
conduct. The theory is that a cause of action dependent
upon statute, such as an action for wrongful death, abates
upon the repeal of the statute without a saving clause;
and that the action for wrongful death is governed by this
rule.

This theory, and its application to the ‘‘guest law’’,
received full consideration by this court in the case of
Krause v. Rarity, 210 Cal. 646 [293 Pac. 62, 77 A. L. R.
1327], and the principles therein discussed are determina-

228 | 7

tive of the instant case. We there dealt with the original
guest law, as enacted in 1929, which took away the right
to recover for ordinary negligence, and permitted recovery
only for gross negligence, intoxication or wilful miscon-
duct. This court held that the statute could not be retro-
actively applied to defeat a cause of action for ordinary
negligence which accrued before its enactment. It was
pointed out that the right of action for wrongful death
remained, but required different evidence to maintain it.
“In other words, there has not been a moment of time
since the enactment of section 377 to the present time
when an action would not lie on behalf of the heirs on
account of the death of the guest. The only change brought
about by the new law was in. the nature and character of
the proof required in each case. There was no abolish-
ment of the right or cause of action, but only a change
in the proof required, not to maintain the action, but to
permit a recovery.’’ (Krause v. Rarity, 210 Cal. 646, 654
[298 Pac. 62, 66, 77 A. L. R. 1327].) See, also, Callet v.
Alioto, 210 Cal. 65 [290 Pac. 438].

This language is clearly applicable to the situation pre-
sented by the 1931 amendment. It may well be that ‘‘wil-
ful misconduct’? differs more radically from ‘‘gross negli-
gence’? than ‘‘gross negligence’ differs from ‘‘ordinary
negligence.’’ Nevertheless the matter is still one of the
nature of proof required to establish the culpability of the
defendant. The right of action against a host for wrong-
ful death of a guest is no more destroyed by the 1981
amendment than by the 1929 statute.

This holding has already been indicated by us in our
denial of a hearing in the cases of Castro v. Singh, 181 Cal.
App. 106 [21 Pac. (2d) 169], and Gardiner v. Hogue, 131
Cal. App. 254 [20 Pac. (2d) 957], in each of which deci-
sions the amendment was held not to be retroactive.: The
same conclusion was reached in Anderson v. Ott, 127 Cal.
App. 122 [15 Pae. (2d) 526].

The judgment is affirmed.

Curtis, J., Preston, J., Waste, C. J., Shenk, J., Thompson,
J., and Seawell, J., concurred.

Rehearing denied.

SES 229

[Sac. No, 4798. In Bank.—Webruary 28, 1934.]

CARL ECKHARDT et al., Appellants, v. JOHN T. MOR-
LEY, as Constable, ete., Respondent.

A. G. Bailey for Appellants.

James 8. Byers and Charles P. Snyder for Respondent.

THE COURT.—This is an action to enjoin an execution
sale. H. M. Kurtz made a promissory note to plaintifis
and appellants for $1700, and to secure payment executed
on May 18, 1932, a chattel mortgage on certain automobiles,
among them the Buick sedan involved in this action. The
mortgage was recorded in Yolo County, where the property
was situated, on May 27, 1932. On May 28, 19382, a certified
copy of the mortgage and certificates of ownership of the
cars were deposited with the Division of Motor Vehicles,
with a request for registration. The registrar refused to
file them for the reasons first, that the certificates of owner-
ship had not been signed by the plaintiffs as mortgagees,
and second, that the filing fees of $1 for the mortgage and
$1 for change of legal ownership on each vehicle had not
been paid. On July 14, 1932, more than a month later, the
certificates, properly signed, and the necessary fees, were
forwarded to the division, and on July 15, 1932, the new
certificates were issued. Prior thereto, however, on July

230 Le |

12, 1982, the defendant constable levied an attachment on
the Buick sedan, in an action against Kurtz, the morigagor
herein. Judgment followed in the action, and execution
was issued. The present suit by plaintiffs is to enjoin
the execution sale.

| | A single issue is clearly presented by these facts.
Did the mortgage become effective as against creditors of
the mortgagor at the time of its deposit with the registrar,
or only wpon its actual registration after properly signed
documents and fees had been forwarded? The lower court
held that it became effective only upon registration, and
that therefore the intervening attachment was prior. We
are of the opinion that no other holding is possible under
our statutes.

The California Vehicle Act (Deering’s General Laws,
1931, Act 5128) makes a distinction between the ‘‘owner’’
of a vehicle, the party having the use thereof, and the
“legal owner’’, the party having either legal title or a
mortgage thereon. Section 4514 of the act provides that
no chattel mortgage on a motor vehicle shall be valid until
the mortgagee is registered as the legal owner; and that
registration of the mortgagee as legal owner and deposit of
a certified copy of the mortgage, gives constructive notice
thereof to subsequent purchasers and encumbrancers. Sec-
tion 49 provides that the division shall not grant any appli-
cation for transfer of registration unless the correct fee
therefor has been paid; and section 77 provides that such
fee shall be paid at the time registration is applied for.
It seems obvious that the act contemplates payment of
fees in advance, and that prior thereto there is no duty to
register the transfer.

Appellants rely upon the single provision of subdivision d
of section 4514 that registration ‘‘shall be deemed complete
when a copy of a chattel mortgage is deposited with and
upon receipt of request for registration by the division
of motor vehicles”. By itself, this statement might be
controlling, but considered in connection with the rest of
the act, it is not. Upon a proper request for registration,
and under the other provisions of the act such request is
proper when the documents are in order and the fees are
prepaid, the registration will date from the time of deposit.
But the mere deposit of the copy of the mortgage, without

EE 231

compliance with the rules for registration, cannot constitute
registration. The situation is analogous to that governing
recordation of instruments affecting title to real property.
Under section 1170 of the Civil Code an instrument is
deemed to be recorded when, after due acknowledgment or
certification, ‘‘it is deposited in-the recorder’s office, with
the proper officer, for record’’, Section 1213 of the same
code provides that a conveyance ‘‘recorded as prescribed by
law from the time it is filed with the recorder for record is
constructive notice of the contents thereof to subsequent
purchasers and mortgagees’’. Construing these sections, we
have held that wherever the purpose of the recordation is to
give constructive notice of the contents of the instrument,
the mere deposit of it with the recorder is not the equivalent
of recordation. (Dougery v. Bettencourt, 214 Cal. 455 [6
Pae. (2d) 499].)
The judgment is affirmed.

[Sac. No. 4788. In Bank—February 28, 1934.]

ALFRED R. JOHNSON et al., Appellants, vy. J. DALE
GENTRY et al., Respondents.

232

Bugene S. Selvage for Appellants.

U. S. Webb, Attorney-General, and Eugene D. Bennett
for Respondents.

THE COURT.—Plaintifis bring this action on behalf of
Bureka Fishermen’s Union, an unincorporated association
of commercial fishermen comprising about 150 members,
against respondents as members and deputies of the Cali-
fornia Fish and Game Commission, to restrain them from
enforcing the provisions of Penal Code section 634, as
amended in 1931. The lower court gave judgment for de-
fendant.

The facts ave not in dispute. The controlling provision
of the statute in question reads: ‘‘No salmon from the
high seas, Oregon, or any other fish and game district may
be brought through fish and game districts six, seven, eight
and nine between the sixteenth day of September and the

ee 238

thirtieth day of April of the year following, both dates
inclusive.’”’? (Pen. Code, sec. 634, subd. 6.) This provision
sets up, during the closed season for salmon fishing within
this state, a barrier to the transportation of salmon caught
outside the jurisdiction of the state. The districts mentioned
therein comprise the three mile marginal belt of ocean
waters from Oregon to the Sonoma County line, and the
waters of Humboldt Bay. In those districts, the law pro-
hibits the taking of fish during the closed season. The
statute under consideration provides also that salmon caught
outside the three mile limit, and hence lawfully acquired,
cannot be transported through the waters of these districts
during the closed season. Plaintifis take their salmon in
the waters of the Pacific Ocean outside the limits of the
districts, and transport them to the city of Eureka for sale.
The statute does not prohibit them from taking or selling
the fish; it is aimed’ solely at transporting them through
the designated waters. Plaintifis therefore urge its un-
constitutionality on the following chief grounds: First, that
it violates the commerce clause of the federal Constitution
by interfering with the transportation into this state of
property lawfully acquired outside the jurisdiction; second,
that it violates the equal protection clause of the Fourteenth
Amendment to the federal Constitution by discriminating
between fishermen and carriers similarly situated.

The purpose of the statute, as appears from the legisla-
tive declaration which first proclaimed it as an urgency
measure, is to protect against excessive destruction of
immature salmon. In the case of Svenson v. Engelke, 211
Cal. 500 [296 Pac. 281], this court held that the statute
as it then read did not prohibit the possession or trans-
portation of fish caught on the high seas during the closed
season. The amended section was enacted to change the
rule of that case. The enlarged scope was made necessary
by reason of the impossibility of enforcing the statute
without such provision. It is pointed out that it is a
simple matter to fish within the districts and claim that
the catch was obtained outside their limits. A patrol force
of prohibitive size and expense would be required for any
supervision over such unlawful activities. Consequently
the statute must, as a practical matter, prohibit all such

234 fC |

transportation. If it does incidentally interfere with inter-
state commerce, such is not its exclusive or major purpose.

With this statutory purpose in mind, the first
contention of plaintiffs may be readily disposed of. In
Ex parte Maier, 108 Cal. 476 [87 Pac. 402, 403, 42 Am,
St. Rep. 129], a statute prohibiting the sale of deer meat,
and applying to deer imported as well as those killed
within this state, was upheld, the court saying (p. 480):
“The facility and ease with which the statutes for the
protection of game have been evaded in the past is a matter
of common knowledge. Deer and other game have been
slaughtered during the closed seagon and foisted on the
market as game procured without the state, and owing to
the practical impossibility in the great majority of cases
of proving with certainty the source from which it was
procured, the attempted enforcement of the statutes for
its protection has largely proven abortive. These and
like considerations no doubt actuated the legislature in the
premises, and induced the enactment of the statute in its
present stringent form. And we know of no good reason
why it should not be held to mean what it says. Similar
statutes in other states have received a like construction.”’
In Union Fishermen’s etc. Co. v. Shoemaker, 98 Or. 659 [193
Pac. 476, 194 Pac. 854], an Oregon statute was upheld
which prohibited possession of salmon caught on the high
seas. The court said (193 Pac, 481): ‘‘Of course the state
of Oregon has no jurisdiction over the waters of the Pacific
ocean beyond the three-mile line; nor did the state by the
enactment of the statute in question attempt to make fishing
beyond the three-mile limit unlawful. The statute was
adopted in order to make effective the prohibition against
taking fish during the closed season from waters over
which the state may rightfully exercise jurisdiction, and
that the state has authority to do this is settled beyond
eontroversy.’? To the same effect, see Stile v. Hesterberg,
211 U.S. 31 [29 Sup. Ct. 10, 53 L. Bd. 75]; Van Camp Sea
Food Co. v. Department of Natural Resources, 30 Fed. (2d)
111; and the remarks of this court in Svenson v. Engelke,
supra.

The other contention of plaintiffs is that the statute
is discriminatory in its operation. It is pointed out that
they may catch fish on the high seas, take the catch to

_ es 235

Oregon, transport it by land into this state, and sell the
fish at their place of business in Humboldt County; and
that to prohibit them from accomplishing the same object

, by the shorter and profitable method of bringing the catch
in by water, is to discriminate between types of carriage
and transportation. An element of discrimination is in-
herent in the operation of the statute, and cannot be avoided
if the object is to be carried out. There is little danger
of unlawfully taken fish coming into Eureka by land, and
there is such danger where the fish are brought in by water.
The authorities above cited dispose of this claim.

HJ Plaintifis make° the further assertion that the stat-
ute discriminates in favor of Monterey salmon fishermen,
to whom the prohibition does not apply. No explanation
of this’ assertion is made, and in the agreed statement
of facts upon which the case was tried, there is no refer-
ence to fishermen operating off Monterey. Consequently
there is nothing in the record by which we may test this
claim of discrimination, and in the absence of a convincing
proof thereof, the presumption in favor of constitutionality
is determinative. Defendants observe, however, that the
particular districts covered by the legislation are those
situated at the mouths of rivers where the salmon ascend to
spawn and propagate, and are in need of the protection.

‘We have considered plaintiffs’ contentions on their merits,
but in fact, the federal questions raised have already been
conclusively determined against them. At the time the
urgency statute was passed, the federal district court had
decided a similar case against certain fishermen operating
in the San Francisco Bay district, and an appeal had been
taken to the United States Supreme Court. The decision
was subsequently affirmed in Noack v. Zellerbach, 283 U. S.
798 [51 Sup. Ct. 490, 75 L, Ed. 1421], the memorandum
opinion reading as follows: ‘‘Decree affirmed. California
Act of April 2, 1931, amending California Penal Code, sec.
634 (Stats. of California, 1931, e. 101) ; Svenson v. Engelke,
211 Cal. 500 [296 Pac. 281]; New York ex rel. Sile v.
Hesterberg, 211 U. 8. 81 [29 Sup. Ct. 10, 53 L, Ed. 75].?

The judgment is affirmed.

[Crim, No. 8684, In Bank February 28, 1984.]

THE PEOPLE, Respondent, v. MANUEL LARRIOS, ’
Appellant.

bo
ES
S

Harry H. Parsons for Appellant.

U. 8S. Webb, Attorney-General, William F. Cleary, Deputy
Attorney-General, and Stanley Mussell, District Attorney,
for Respondent.

SEAWELL, J.—This appeal is from a judgment impos-
ing the death penalty, and from an order denying a motion
for new trial. The defendant was informed against, tried
and convicted in the Superior Court of the County of San
Bernardino of murder of the first degree. The court there-
upon pronounced the death penalty upon him as the law
directs in such cases. The jury was fully instructed that
it was within its discretion to relieve the defendant of the
extreme penalty of the law by its verdict, but in order to
do so, in case its verdict should be murder of the first
degree, it would be necessary for it to affix the penalty in
its verdict at life imprisonment in the state penitentiary,
and upon a failure to do so the law imposed the duty upon
the trial judge to sentence the defendant to suffer the
extreme penalty of the law. That the law imposes the death
penalty in such cases is too well settled to require a citation
of authorities to the point.

All of the parties to the homicide, including the witnesses
to the shooting and those who testified to the material facts

; Le 241

bearing upon the conduct of the actors at the time of, and
shortly prior thereto and immediately thereafter, are of
Mexican blood.

The shooting of Matias Rodriguez by defendant Manuel
Larrios, sometimes called Mariano Alvarado, which resulted
fatally a few hours thereafter, occurred on June 4, 1933,
near the entrance to the La Luz del Dia Cafe, located at
626 Mt. Vernon Avenue, apparently an outlying business
district of the city of San Bernardino, within which area
quite a few Mexicans have shops or reside.

The evidence shows that defendant is a native of Mexico
and during the last ten years he had resided four years
in the state of Colorado and six years in the city of
San Bernardino. During the last two years preceding the
shooting he resided at the home of Mrs. Martinez, 1271
Spruce Street, situate approximately 800 feet from the
place where the shot was fired, at which house it appears
that her mother and several children and perhaps one or
two other persons resided. [J The defendant complains
that he was not permitted to answer a question put to him
as to whether or not the people who lived in said house
were under his ‘‘charge’’, and the further question, ‘Are
you the Godfather of any of the children-there in that
house?”’? No offer, however, was made by counscl to prove
the existence of the facts as implied by said questions and
the matter evidently was regarded as one of little impor-
tance. While the examination was rather rigidly restricted
in this and a few other particulars we cannot say, in view
of the whole case, that the defendant was seriously, if at all,
damaged by such rulings. The purpose of the above ques-
tions doubtless was to show that the defendant was at the
Mexican cafe, where the shooting took place, on the peace-
ful mission of buying some tacos to take to the Martinez
home. The purpose of said visit, however, was fully shown
by the admitted fact that he purchased six tacos or tortillas,
sometimes called Spanish tamales, at said cafe, paid thirty
cents for the same and finally reached the Martinez home
with them.

While the matter excluded by the court’s ruling would
have had no direct bearing on the homicide, nevertheless
a person on trial for his life should, as against technical
objections, be permitted to state, within reasonable limita-

a

242, es —

tions, something of his background. In some eases it may
have a legitimate influence upon a jury in considering
whether or not it should relieve the defendant of the ex-
treme penalty of the law. In meting out the punishment
for the commission of the crime of murder a jury, under
the statute, is given a wide discretion. (Sec. 190, Pen.
Code.) In the instant case it is not probable that defend-
ant suffered injury by the rulings .of which complaint is
made.

‘We now turn briefly to the history of the homicide as
told by a number of witnesses.

Deceased, Matias Rodriguez, about twenty-six years of
age, and his companion, Aniseto Delgardo, also a young
man, resided at Bryn Mawr, or Redlands Junction. They
had been companions practically all their lives. The de-
ceased resided with his unmarried sister and Delgardo re-
sided not far away. Deceased was the owner of a Ford
touring car. On Sunday afternoon, June 4, 1933, some
time between 1:30 and 2:30 o’clock, they left their homes
to attend a ball game and later rode about San Bernardino
until about 8:15 o’clock, at which hour they arrived at the
La Luz del Dia Cafe, where they ate their dinners. The
deceased and his companion, Delgardo, were strangers to
the defendant and to all the other persons at the cafe.
The defendant was known to the cafe people, to Reyes and
to others residing in the immediate vicinity of the cafe.
He seems to have been known as Mariano. Evidently the
deceased, by his identification of defendant, had, so far as
he could recall, no previous acquaintance with the defend-
ant. Delgardo, his companion, could not recall ever hav-
ing seen the defendant before he saw him at the cafe on
the evening of June 4th. The evidence is to the effect that
none of the parties, so far as sobriety was concerned, ap-
peared to be affected with intoxicating liquor.

At the time the deceased and Delgardo entered the cafe, the
defendant, who had ordered six tacos, was leaning against
the counter or some object, waiting for the owner of the
cafe, Mrs. Pattino, to prepare said tacos. Laura Florez, a
young Mexican girl, was the waitress. It is the claim of
Luis Reyes, admittedly an old acquaintance of the defend-
ant, and no doubt very friendly with him, that he was
seated in the cafe when the deceased and his companion
entered. The waitress, Laura Florez, and the defendant

a es 243

corroborate him in this respect. Delgardo, on the other
hand, was quite positive that Reyes was not in the cafe
when he entered. However this may be, it is certain that
deceased and Delgardo seated themselves at a table, and
ordered their dinners, and that while they were eating the
defendant, who was awaiting his order, left the cafe and
presently returned. The waitress finally gave him his
order in a paper bag, and he paid her thirty cents there-
for, and left the cafe through the street door. The de-
ceased, having finished his meal, went to the washroom
and returning paid for the meal and left the cafe a couple
of minutes after the defendant. Shortly after the de-
ceased passed through the door into the street a shot was
heard. Delgardo’s narrative of the shooting was that when
he passed outside he saw the deceased and the defendant
standing near the deceased’s car, facing each other about
three feet apart and the deceased had his hand to his side.
Delgardo, addressing his companion, asked what had hap-
pened. Defendant had the pistol in his hand and when
Delgardo asked what had happened he turned the pistol on
him and said if ‘‘I wanted some that he had some for me.’’
Delgardo said he didn’t know what had happened. He
didn’t know what the trouble was about. The defendant
then ran across the street into an alley which led through
the opposite block and into a public street paralleling Mt.
Vernon Street. Said alley was fenced. Delgardo followed
along the fence on the outside of the alley in an effort to
note the direction of defendant’s flight and saw him turn
into said street. In so doing he was not seen by the de-
fendant. Being unarmed he preséntly returned to his
wounded companion, who was in much pain. No one else
was in sight. He placed deceased in his automobile and
drove him to the city hall and from there he was taken to
the hospital, where he died the next day, after an opera-
tion in an effort to save his life. Three police officers, who
were immediately detailed to apprehend the person who
had shot the deceased, went to the cafe and interviewed the
young lady waitress and the proprietress. No other per-
son who claimed to witness the shooting was there. From
the cafe they went directly to a bakery next door to the
cafe and interviewed Mr. Gomez, the proprietor, and from
there they went directly to the Martinez home, 1271 Spruce
Street, arriving at 9:45 o’clock. The shooting occurred at

244, Let Ye

about 8:30. At the Martinez home they found the defend-
ant, a Mr. Sandoval, Mary Duval and Mrs. Martinez.
They were all in the kitchen. The officers asked the com-
pany if there was anyone there named Mariano and were
informed by the spokesman that there was no one there by
that name. Defendant appeared to be very nervous.
Asked if he was Mariano he replied in the negative. A
search was made of the house for weapons, but none were
found. The defendant was told that he would be taken
into the presence of the wounded man for purposes of
identification. He denied that he was at the cafe on the
night on which the deceased was shot or that he had had
any trouble with anyone or knew anything about the mat-
ter or that he had a gun. Mrs. Martinez rode by defend-
ant’s side to the hospital, representing herself as his sister,
and talked with him in a low tone in Spanish during the
izip to the hospital. Upon being brought into the pres-
ence of the wounded man, who was suffering great pain,
the officers asked him if the defendant was the man who
shot him. He replied, ‘‘Yes, that is the man who shot me;
he shot me without any cause. I didn’t want to fight.’’
The defendant’s reply was, ‘‘No.’’? Mrs. Martincz admon-
ished the deceased to ‘‘be careful and sure’? what he was
saying as he was making ‘‘a very serious charge’. The
deceased replied, ‘‘He shot me without cause.” The de-
fendant was forthwith placed under arrest. The evidence
of the eye-witnesses and the uncontrovertible circumstances
identified the defendant as the person who fired the shot so
completely that he afterward abandoned his defense of alibi
and at the trial admitted the shooting, but claimed that he
was protecting himself against a threatened assault about
to be made upon him by Delgardo and in his attempt to
shoot Delgardo he missed his mark and hit Matias Rodri-
guez, the deceased.

Imis Gomez, a boy seven years of age at the time of the
homicide, was very close to the defendant, whom he re-
ferred to as Mariano, at the time he fired the shot. His
father conducted a bakery adjoining the cafe and the boy
was on the outside and saw the defendant fire the shot.
He testified that he saw only three men, the defendant,
deceased and Delgardo, on the outside of the cafe. He saw
defendant, without any words having been passed by any-

a es 245

one, shoot, and he saw the wounded man assume what he
described as a dying position. He also saw the defendant,
after hiding a moment behind a truck, flee from the scene.
The boy picked up the empty shell which the defendant
ejected from his 25-calibre automatic revolver. The boy’s
testimony is somewhat confusing in its references to the
deceased and Delgardo. Several times he used the term
“the other man’? interchangeably with the deceased and
Delgardo. Both men were strangers to him. As to the
defendant, whom he Imew, there was no confusion as to
his part in the commission of the homicide. No justifica-
tion whatever is shown for the shooting by the boy’s testi-
mony.

HB The defense, which took on a dual aspect, was that
Delgardo was the real assailant and that his motive was
either to rob the defendant or to assault him with a knife
and that the defendant did not in fact shoot at the de-
ceased, Rodriguez, who was an innocent bystander, but bit
him by accident. The defendant, in aid of this theory, tes-
tified that he had $78 in currency in a bill fold or wallet,
which he displayed when he paid the waitress thirty cents
for the six tacos and the inference was that the deceased
and Delgardo saw the money and Delgardo thereupon
formed the intent to relieve him of his money. Neither the
girl whom he paid, nor Delgardo, nor anyone else in the
cafe saw him with any money other than thirty cents, nor
did he produce any convincing proof whatever that he had
any such sum of money on his person, or that he had even
a wallet. On the other theory, that Delgardo was the ag-
gressor and was attempting to provoke an encounter with
him, he testified to the former directing a most insulting
word at him, which no one seemed able to satisfactorily in-
terpret. Whether it was a term of unspeakable reproach,
or one of trifling significance, remains in doubt. Whether
it was spoken at all, and if so its provocative effect, were
matters solely for the jury’s consideration. | | The tes-
timony offered by the defendant and his witness Reyes to
the effect that Delgardo was advancing upon defendant in
a threatening manner when he fired the shot were questions
of fact solely for the consideration of the jury and it is not
the province of an appellate court to weigh conflicting evi-
dence ‘unless the evidence offered to prove the fact found

246 a —

is inherently weak or improbable. No such situation is pre-
sented by this record. Defendant does not claim that he
saw a knife, but that Delgardo was pulling his hand out
of his front pocket when he shot. In accounting for the
pistol the defendant testified that while running up the
alley with the paper bag in one hand and the pistol in the
other he stumbled and fell and dropped the pistol and he
did not stop to pick it up. He also claimed at the trial
that he had but a single cartridge in the revolver chambers.
The pistol was not produced at the trial or otherwise ac-
counted for.

The defendant made no satisfactory explanation as to
why he waited on the outside of the cafe until the deceased
and his companion came out of the cafe. According to the
testimony of several witnesses, whom the jury unquestion-
ably believed, the defendant must have waited several
minutes for the deceased and his companion to appear.
The evidence given by the defendant and witness Reyes as
to the order in which the parties left the cafe and what
occurred on the outside was contradicted by apparently
creditable witnesses offered by the prosecution, one or two
of whom were seemingly disinterested persons, and their
testimony was sufficient to sustain the verdict of the jury.
The testimony of both the defendant and Reyes in a num-
ber of particulars is so improbable as to impeach its verity.
Reyes, who was a man fifty years of age, made no timely
report to anyone so far as the record discloses of the
tragedy he claims to have witnessed. The defendant fled
from the scene and denied knowledge of the shooting until
about the time he was put on trial. No complaint of an
attempted robbery or a threatened assault was made by
him until he put on his defense. When taken into the
presence of his victim and charged with the crime he made
no attempt to justify his act, but instead sought to avoid
the responsibility of his act by denying that he had any
Imowledge of the cause of Rodriguez’ death.

Appellant assigns a number of the court’s rulings as
error. In a few instances the rulings may be said to be
erroneous in excluding or admitting testimony as to rather
unimportant matters, but we are unable to find that the
defendant suffered prejudicial injury thereby. | One
of said assignments consists in the refusal of the court to

| a 247

permit the defendant to answer a question as to why he
had the revolver upon his person. The court in sustaining
the objection of the district attorney informed defendant’s
counsel that he might renew the question on the following
day, at which time he would give it further consideration.
It does not appear that the matter was again called to the
attention of the court. That the defendant had the pistol
on his person and used it is admitted and no claim was
made that he armed himself for the express purpose of
shooting the deceased. No such inference could have pos-
sibly been drawn from the mere possession by him of the
revolver, nor could it have infiuenced the jury’s delibera-
tions. The crucial question for the jury’s determination
was whether he was justified in using the deadly weapon
in the circumstances of the case. [J Another assign-
ment of error was directed at the testimony of a witness
to the effect that defendant’s reputation for peace and
quiet was bad. The question as put was whether the wit-
ness knew the general reputation of the defendant in the
community in which he lived for ‘‘truth, honesty and in-
tegrity, and for peace and quiet.’’ (Italics ours.) The
witness answered that he did. The witness was then asked,
“What is his reputation?’? His answer was, ‘‘Very bad.’’
Defendant’s counsel at this juncture stated that he was
engaged in talking with his client and he did not hear the
last question and answer. The question and answer were
read and he then moved to strike out the answer and asked
that he be permitted to place an objection to the question.
The objection came somewhat late, as the italicized portion
of the question at once shows that that portion of the ques-
tion was objectionable, inasmuch as the defendant had not
attempted to show that his reputation for peace and quiet
was good. The court, however, permitted the objection to
be placed in time, and overruled it. The defendant did not
move to strike out the objectionable portion of the question,
but his motion went to the entire question. Unquestion-
ably the defendant’s reputation for truth, honesty and in-
tegrity was put in issue and open to attack the moment
he became a witness. Such is the universal rule. That
portion of the question was properly in the case. No spe-
cifie objection was directed at the portion that was amen-
able to objection. In making objections counsel must call

248 PF |

the attention of the court to the specifie subject matter
which he deems to be improper. Some four or five other
witnesses testified that the defendant’s reputation for
truth, honesty and integrity was bad, but the question as to
his reputation for peace and quiet did not again arise.

Another ground of assignment of error is made by
reason of the court sustaining an objection to questions
asked the defendant as to whether he knew that the de-
ceased and his companion saw the money which he had in
his purse; or whether he showed it or exhibited it so that
said two men could see it; or whether he knew that said men
knew that he had money in his pocket. These questions
were separately asked. Strictly speaking, the defendant
should have explained how he handled his purse or money,
if he had either, and stated the facts from which the jury
may have concluded that the deceased and Delgardo should
have known that defendant had the sum of money that
he claimed to have had upon his person. The line is quite
shadowy in some cases as to whether evidence amounts to
a conclusion or a statement of fact. We are of the view
that it would have worked no hardship on the defendant to
have explained the manner in which he handled his wallet,
if he actually had one.

HI Complaint is made as to the refusal of the court
to permit counsel for defendant to impeach witness Del-
gardo on the record of the transcript of testimony taken at
the preliminary examination without first exhibiting to the
witness said testimony, which, it is claimed, is contradic-
tory of his present testimony. Where the testimony of a
witness was taken by an official stenographer at the pre-
liminary examination and the transcript of the proceedings
was accessible to the defendant he must, where he under-
takes to impeach the witness as to his testimony given at
said examination, call the attention of the witness to the
specific matter, permit him to read the questions and an-
swers, if he so desires, and then ask him if he so testified.
The fact that an interpreter was used does not alter thé
rule. Interrogating the witness in terms of conclusions as*
to whether his testimony at said hearing was contradictory
of his present testimony is clearly not permissible.

Many of the assignments are not well taken. Hither the
alleged error was afterward corrected—as, for example, the

a a 249

defendant was not allowed to slate at an early stage of the
trial the country of his birth, but later did so state, or
the matters complained against were so inconsequential as
not to require detailed analysis.

A number of instructions, especially the one de-
fining the weight to be given to flight, and self-defense, are
assailed. In every instance said instructions were but a
repetition of the well-approved instructions of this court on
the subjects to which they relate. The complaint that the
instruction on flight had no application to the facts of this
ease is wholly without foundation. That the defendant fled
from the scene of the crime and: attempted to conceal his
identity as the person who fired the shot which resulted in
the death of Rodriguez, so far as the fact is concerned,
might as well be conceded. It is not open to question. We
‘have examined all the instructions given by the court and
it cannot be said that the defendant was denied any legal
right either in giving the instructions as a whole or refus-
ing to give certain instructions offered by the defendant.

On motion for a new trial the counsel for appellant
has filed an affidavit in which he avers refusal on the part of
the sheriff or jailer to permit counsel to interview his client
through an interpreter of his own choice. Further com-
plaint is made that the prosecution instructed several wit-
nesses not to give the defense any information as to what
their testimony would be at the trial. If this affidavit cor-
rectly set forth the attitude of the sheriff and district at-
torney they exceeded their authority in the premises. While
the affidavit contains averments of unauthorized acts on the
part of said officers, it contains no averment that counsel
for the defense was denied the privileges which the law
guarantees to every person charged with crime to prepare
his defense. The day on which the unauthorized acts are
averred to have taken place was July 3d, prior to the set-
ting of the case. Affiant does not aver that he did not
thereafter interview said witnesses, except the defendant
himself, and it does not appear that he would not have
been granted the right to converse with his client through
his own interpreter rather than the official interpreter had
he so requested. It appears that the matter was brought
to the attention of the court but once, and while it was
under consideration hy the court counsel for defendant re-

250 Ll |

lJaxed his effort and nothing further appears to have been
done in the matter. He admits that during the trial his
interpreter sat by his side. The defendant evidently spoke
English to some extent. It’ will be observed, however, that
counsel does not anywhere aver that he was in any wise
hindered or deprived of the opportunity of fully develop-
ing his defense, or that he was injured by the matters set
forth in his affidavit. No continuance or adjournment was
requested or complaint made to the court that the defense
was not fully prepared and ready to go forward with its
ease. The transcript of testimony which we have carefully
read, consists of more than 250 pages and it does not ap-
pear from an examination thereof that defendant was em-
barrassed or hindered in any way in the preparation and
development of his case.

HH Appellant presented a second affidavit on motion
for new trial in which Mary Moreno Duval is the affiant.
She is doubtless the woman who was at the Martinez home,
where the defendant was apprehended at the time the offi-
cers visited said place shortly after the shooting. She gave
no information as to her identity other than her name.
“She avers that she was 150 feet distant from the parties
when she saw after nightfall an altercation betwéen the
three parties in question; that the defendant was using the
paper bag in an effort to protect himself from Delgardo,
who was advancing upon him; that the defendant, after
being followed, drew his pistol; that she covered her eyes;
that hearing no shot she removed her hands from her eyes
and saw the deceased and Delgardo trying to take the gun
away from the defendant and that he retreated. Affiant
again covered her eyes and heard a shot. When she
opened her eyes the defendant was running away from the
scene of the trouble. After a minute or two she went into
the cafe and asked the owner if she heard the shot and she
was told that it was simply backfire from the automobile.

The record contains a third affidavit made by Jennie
Mercado. The substance of her brief affidavit is that she
was waiting in the kitchen of said cafe for an order of
sandwiches and that she observed through a window frame
one foot square, set in the door leading into the dining-
room, Reyes, Rodriguez and Delgardo eating their meals
in the adjoining room; that when the defendant paid Laura

a | 251

Florez for the tacos she saw him take from a pocket-book
a paper bill and he also took some silver therefrom and
paid Laura Florez for said tacos; that defendant left the
cafe and was immediately followed by Delgardo; that
Rodriguez followed Delgardo and Reyes followed some
seven or eight feet behind the deceased; that she heard a
shot. That she went outside a few minutes thereafter, but
she saw no one; that Mary Duval passed her going into the
cafe. From the crowd she afterward learned someone had
been shot.

The affidavits upon scrutiny are not impressive. Fur-
thermore, all of the affiants were acquaintances of defend-
ant and no excuse is given as to why they were not called
as witnesses. [J Appellant explains that the district
attorney was required under the statute to call Reyes.
There is no merit in this claim. Neither party is required
to call any person as a witness whose testimony he is not
willing to vouch for. A district attorney who should call
a witness whom he had reason to believe would testify
falsely in favor of either the defendant or the People
would violate his oath of office. Reyes was called by the
defense.

Between the period of conviction and motion for a new
trial the court informed counsel that in the absence of
proof of specific motive, and: also because of the shortness
of time which elapsed from the time that the defendant left
the cafe and the shooting, which occurred a few minutes
thereafter, he was uncertain as to whether the jury should
have found the defendant guilty of a greater crime than
murder of the second degree. Upon further examination of
the law on the subject the court announced that it was
satisfied that the crime constituted murder of the first de-
gree and pronounced the judgment from which this appeal
was taken.

HME it is well settled that the prosecution is not re-
quired to prove motive. Proof of the existence of motive,
or a want of such proof, is obviously a matter which the
jury should, and doubtless does always, consider in arriv-
ing at its verdict. But proof of motive, if the evidence is
otherwise sufficient to support the verdict, is not made a
prerequisite to a conviction.

252 | |

HN The law implies malice when there is manifested
a deliberate intention to take the life of a fellow creature.
Tt is implied, when no considerable provocation appears, or
when the circumstances attending the killing show an aban-
doned and malignant heart. (Sec. 188, Pen. Code.) The
evidence supports the implied finding of the jury that the
killing was without provocation and was committed under
circumstances which showed an abandoned or malignant
heart. JJ If it would have been murder for the de-
fendant to have intended to kill Delgardo and in the exe-
cution of such attempt he unintentionally killed Rodriguez,
the unlawful intent is transferred from the person intended
to be killed by the given act to the person actually killed.
The law applies with equal force and effect to the killing
of the latter as it would have applied to the unlawful kill-
ing of the former.

The rules of law by which malice aforethought and pre-
meditation are to be determined have been so thoroughly set-
tled by section 188 of the Penal Code, and the many decisions
of this court beginning with our earliest—making special

. reference to People v. Iams, 57 Cal. 115, where the subject
was profoundly considered and the rule herein stated was
definitely adopted, and ending with our latest decision,
People v. Fleming, 218 Cal. 800 [28 Pac. (2d) 28]—that
nothing may be added which would better assist juries
and courts in their effort to fathom the intent of persons
charged with homicides. Said rules form an important
part of our criminal law structure and are our judicial
guides in judging the intention and purposes of men in
the commission of wilful and voluntary acts which are so
violent in form as to ordinarily result in the death of or
eause great bodily harm to the person against whom they
are directed,

The rule as restated in People v. Fleming, supra, may
here be repeated, as it answers the objection made by ap-
pellant as to shortness of time intervening between the
intention to kill and the act of killing in the instant case
as it did in the Fleming case:

“But this court has said on innumerable occasions that
in order to prove premeditation in one charged with mur-
der it is not necessary to show that any appreciable space
of time elapsed between the intention to kill and the act of

7 | 258

killing. It is only necessary to quote from People v. Hunt,
59 Cal. 480, 435, the following statement of the law on this
subject: ‘There need be no appreciable space of time be-
tween the intention to kill and the act of killing; they may
be as instantaneous as successive thoughts of the mind. It
is only necessary that the act of killing be preceded by a
concurrence of will, deliberation, and premeditation on the
part of the slayer, and if such is the ease, the killing is
murder in the first degree, no matter how rapidly these
acts of the mind may succeed each other, or how quickly
they may be followed by the act of killing.’ The precise
language of this decision has been repeated on numerous
occasions by this court and the principle there enunciated
is irrevocably established as a part of the law of this state.
(People v. Bellon, 180 Cal. 706, 710 [182 Pac. 420].)’?

In those cases where one ‘‘with no considerable provoca-
tion” viciously or wickedly shoots down another, section 188
of the Penal Code, implies malice. The same is true when
the killing shows an abandoned and malignant heart. The
evidence is amply sufficient to sustain the implied finding
that the defendant acted ‘‘with no considerable provocation’’
in bringing about the death of Rodriguez. There is some
evidence in the record on the part of defendant and his
witness, Reyes, which, if believed, would tend to afford some
evidence of express malice or premeditation on the part of
the defendant. Reyes testified that when the defendant was
inside the cafe either Delgardo or Rodriguez said something
to the defendant which he was unable to hear. The de-
fendant also testified that when he walked toward the piano
to drop a nickel in the slot he heard one of the men ‘“‘say
something, but I did not understand what they said, and
I turned around and went back’’. Subsequently he was
asked if either of the men said anything to him while inside
of the cafe and his answer was, ‘‘Not a single word.”
Whether he smarted under a fanciful belief that some refer-
ence had been made to him by the deceased or his com-
panion while in the cafe, is somewhat confused on account
of the defendant’s inconsistent and contradictory testimony,
but it is beyond question that he was armed and that he
left the cafe first and waited, according to the testimony
of several witnesses, from 3 to 5 minutes on the outside
and immediately upon the appearance of the deceased he

254 Le |

shot him. There was no reason why he should have waited
on the outside, and if he had feared any mistreatment at
the hands of the deceased and his companion, who were
peaceably eating their meals, he would have gone his way
and the killing would not have happened. His waiting on
the outside and his quick action upon the appearance of the
deceased would indicate malice or premeditation.

The case is one resting entirely upon the testimony
of witnesses whose credibility was subjected to the scrutiny
of the jury, and there appears to be no reason why its find-
ings of fact should be questioned by this court. The con-
duct of the defendant following the homicide is absolutely
inconsistent with the conduct of a person who felt the con-
sciousness of justification. His testimony in accounting for
his act and the circumstances thereof is not impressive.
This court in such cases is not authorized to interfere with
the judgment of conviction.

The judgment and order appealed from are affirmed.

Shenk, J., Thompson, J., Preston, J., Waste, C. J., and
Curtis, J., concurred.

[S. F. No. 14941. In Bank.—Mareh 1, 1934.]

H. W. McPIKE, Administrator, ete, Petitioner, v. SUPE-
RIOR COURT OF THE CITY AND COUNTY OF
SAN FRANCISCO et al., Respondents.

255

H. H. McPike for Petitioner.
Cleveland R. Wright for Respondents.

THE COURT.—A hearing was granted in this case after
decision by the District Court of Appeal, First Appellate
District, Division Two. Upon further consideration, we
are satisfied that the opinion of Mr. Justice pro tem.
Dooling properly disposes of the issue, and we therefore
adopt said opinion as the opinion of this court. It reads
as follows:

“The petitioner secks by certiorari to have annulled an
order of the Superior Court sitting as a probate court.

256 Le 7

From the return it appears that the petitioner is the duly
appointed and qualified administrator of the estate of
Margaret A. Jennings, deceased. On June 27, 1932, peti-
tioner as such administrator, filed in the respondent court
a petition for permission to compromise certain litigation
pending against the estate of his decedent. In such peti-
tion he alleged that an action had been commenced against
him, as administrator, by one Annie Gillespie, claiming title
to all the property of the estate, consisting of a sum of
money slightly in excess of $4,000, which at the time of
decedent’s death had been on deposit in a certain bank,
and seeking judgment against him, as administrator, ad-
judging that’ she was such owner and declaring that peti-
tioner, as administrator, held such sum in trust for her;
that such action was at issue and ready for trial; and ‘that
a few days before the date of trial of said action, counsel
for defendant and counsel for plaintiff held a consultation
and agreed that a reasonable and proper settlement of said
action could and should be made by defendant, therein as
administrator of the said estate, paying to plaintiff the
sum of one thousand ($1,000.00) dollars’, The petition
asked that the court authorize petitioner as such administra-
tor to settle said action for such sum. The court fixed a
date for the hearing of the petition to compromise, and
ordered a citation to issue to Kate Sidles, the sole heir of
the decedent. The citation was regularly issued and served
and notice of the hearing given by posting, and the court
after hearing the petition made its order on July 25, 1932,
by which petitioner herein was ‘authorized to pay to said
Annie Gillespie the sum of one thousand ($1,000.00) dol-
lars in full settlement of all claims and demands of Annie
Gillespie against the said estate and said administrator’
upon the receipt of a dismissal of her said action with
prejudice and a signed satisfaction.

‘Thereafter, Cleveland R. Wright, an attorney at law,
filed in the matter of such estate an affidavit reciting that
he is the attorney for Annie Gillespie in the action against
petitioner, as administrator of the estate of Margaret A.
Jennings, deceased; the nature and purpose of said action;
the fact that when said action was ready for trial he and
eounsel for petitioner had agreed to compromise it for the
sum of one thousand dollars; the proceedings had in the

es 25

probate court terminating in the making of the order
authorizing such compromise; repeated demands for the
payment of such sum of $1,000, coupled with the tender of
a dismissal with prejudice and a satisfaction as required
by said order; and the failure and refusal of petitioner,
herein, to pay the $1,000 or carry out the compromise.
Affiant asked for the issuance of an order to show cause
io petitioner herein, and for an order of the court directing
him, as administrator, to pay to Annie Gillespie such sum
of $1,000. A citation issued and petitioner herein ap-
peared by demurrer attacking the jurisdiction of the court
over the subject matter. The order herein attacked fol-
lowed, by which petitioner herein is ‘ordered and directed
to pay to Annie Gillespie within five (5) days from date
hereof the sum of one thousand ($1,000.00) dollars pur-
suant to his said agreement of compromise and the order of
this court made on July 25, 1932, approving the same’.

“Upon this proceeding we are not concerned with the
propriety or impropriety of petitioner’s conduct with regard
to the compromise, nor with the correctness or incorrectness
of the action of the trial court in making the order com-
plained of, further than to determine the single question
whether the respondent court had jurisdiction to make such
order. (4 Cal. Jur., p. 1106.) ©

|| “‘The probate court has the power to authorize the
compromise of an adverse claim of a third party to the
property of an estate. (Probate Code, see. 578, formerly
Code Civ. Proe., sec. 1588, as construed in Merrill v. Bach-
elder, 123 Cal. 674, 676 [56 Pac. 618].) The precise lan-
guage of that code section is: ‘A compromise may also be
authorized by the court or judge when it appears to be
just and for the best interest of the estate.’

“Nowhere in express terms is the probate court given
the power, sought to be exercised by the order here under
attack, of compelling the administrator to carry out and
perform the provisions of a compromise so authorized.
[| It is settled that ordinarily a probate court has no
jurisdiction over the adverse claims of third persons to
property in the estate (11 Cal. Jur., p. 262, sec. 42) and
this for the reason ‘that either the person initiating the
attack or the person resisting the attack is lacking in
privity to the probate proceedings’. (Bauer v. Bauer, 201

[|

258 Ee |

Cal. 267, 271 [256 Pac. 820].) J It is equally well
settled that while the superior court, sitting in probate, is
a court of general jurisdiction, ‘the proceedings being
statutory in their nature, the court has no other powers
than those given by statute and such incidental powers as
pertain to it and enable the court to exercise the jurisdic-
tion conferred upon it, and can only determine those ques-
tions or matters arising in the estate which it is authorized
to do. Thus, in the exercise of the powers conferred upon
it, its jurisdiction is limited and special, or limited and
statutory.’ (11 Cal. Jur., pp. 248-9, see. 34.)

“It is respondent’s theory that the power to make the
order under attack is incidental to and to be implied from,
and necessary to carry out and make effective, the power
of the court to authorize the administrator to make a com-
promise. It is the petitioner’s contention that the juris-
diction of the court goes no further than the express lan-
guage of the statute.

[| “The language of the statute is permissive, and not
mandatory: ‘A compromise may also be authorized by the
court.’ In this connection it is worthy of note that in
other proceedings where it was the purpose of the legis-
lature to make the action of the administrator mandatory
and subject to the order of the court in dealings with
strangers to the estate appropriate language is used to
indicate that intention. Thus in the matter of the payment
of approved claims the court is given the express power to
order their payment (Probate Code, sec. 952); in the
matter of carrying out a decedent’s contracts to convey
property the court is given a like express power (Probate
Code, secs. 850-853); in the case of the mortgaging of
property of the estate it is mandatory upon the administra-
tor to execute the mortgage or deed of trust (Probate Code,
see. 833) which the court ‘shall make an order authorizing
and directing’ him to do (Probate Code, sec. 832); in the
ease of leases of property of the estate similar mandatory
provisions are found (Probate Code, secs. 842, 843); and
im the case of probate sales after the order confirming the
sale is made ‘conveyances must thereupon be executed’.
(Probate Code, sec. 786. See, also, Probate Code, sees.
802, 812.)

259

“It is thus apparent that in the several instances enumer-
ated where the legislature intended to give the court juris-
diction to compel action by the administrator in his dealings
with strangers to the estate it used definite and appropriate
language to expressly grant such power. In the case of
compromises, however, no such language was used. The
court is not given power to ‘direct’ the making of compre-
mises but only to ‘authorize’ them. It is not provided that
compromises ‘shall’ or ‘must’ be made by the administrator
when authorized by the court, but that they ‘may’ be made.
The internal evidence of the Probate Code indicates
strongly that it was not the intention of the legislature to
confer upon courts sitting in probate the power or juris-
diction to compel action by the administrator in the case
of compromises. .

Hl ‘‘As petitioner well points out, a compromise agree-
ment, even though entered into, may be attacked for fraud
in the inducement (5 Cal. Jur., p. 408, sec. 17) or may
lack consideration where the claim which is the subject of
the compromise is ‘wholly without foundation and known
to the claimant to be so’. (Union Collection Co. v. Buck-
man, 150 Cal. 159, 168 [88 Pac. 708, 710, 119 Am. St. Rep.
164, 11 Ann. Cas. 609, 9 L. RB. A. (N. 8.) 568]; McClure
vy. McClure, 100 Cal. 339, 348 [384 Pac. 822].) We are not
called upon to speculate about the reasons which moved
petitioner to refuse to carry out his compromise agreement.
We are only concerned with the jurisdiction of the court
in a probate proceeding to compel him to do so. If the
court had jurisdiction to make such an order it would
necessarily have jurisdiction to try the issues raised by
such defense as petitioner saw fit to make. But the juris-
diction to try purely collateral matters with strangers to
the estate is not to be lightly inferred.

‘Respondent cites and strongly relies upon Estate of
Davis, 27 Mont. 490 [71 Pac. 757]. There a will contest
was instituted over which the probate court had express
statutory jurisdiction. A compromise was effected which
was confirmed by decree of the court determining that the
estate should be distributed to certain persons in designated.
proportions as determined by the compromise agreement.
Thereafter the power of the court to order distribution in
accordance with this decree was attacked on the ground
that certain of the parties were strangers to the proceed-

260

ings. The court very properly held that having jurisdie-
tion of the parties and of the subject matter it had juris-
diction to enter the consent decree pursuant to the agree-
ment of compromise, and that such decree became the basis
of administration so far as the distribution of the estate
was concerned. This case is not apposite here. The re-
spondent court had no jurisdiction of the person of Annie
Gillespie, who was claiming adversely to the estate, nor of
her action against petitioner as administrator, and could
not acquire jurisdiction over either. It had only the limited
jurisdiction to authorize petitioner to compromise with her.

“*We conclude that a superior court sitting in probate has
no jurisdiction over the matter of compromising a claim
against an estate except that expressly given by the Probate
Code, viz.: to authorize the administrator to make a com-
promise. ’”

The order of November 23, 1982, here under review, is
accordingly annulled.

[Sac. No: 4754, In Bank—March 1, 1934.]

CAPITAL NATIONAL BANK OF SACRAMENTO (a
Corporation), as Guardian, etc., et al., Respondents, v.
EDWIN P. STOLL, ete., et al., Appellants.

ee 2c.

Howe, Hibbitt & Johnston and White, Miller, Needham,
Harber & Mering for Appellants.

Inman & West, Sheridan Downey, Morgan V. Spicer and
Ralph H. Lewis for Respondents.

THE COURT.—We hereby adopt the following portions
of our former opinion as a statement of the facts and issues
presented in this case:

“This appeal is from a judgment in favor of plaintiffs
declaring that a contract employing the defendant Edwin
P. Stoll was terminated by the incompetency of his father
and employer, John T. Stoll, and restraining the defendant
Edwin P. Stoll from interfering with the possession of the
property or its management by the guardian. The facts
necessary to understand the controversy are few and free
from complications. All the defendants are sons of John T.
Stoll, one of the plaintiffs. The plaintiff Jennie T. Stoll
is his wife and the stepmother of the defendants. We do
not include the bank as a plaintiff for reasons hereinafter
to be stated.

262

“For more than eight years before October 26, 1929,
Edwin P. Stoll had been employed by the Remington Arms
Company, and on the date mentioned, and for about four
years prior thereto, was manager of its western cutlery divi-
sion at a salary of $350 per month, together with his travel-
ing and other necessary expenses when away from his home.
His prospects with that company were very good and the
opportunity for further advancement excellent. He saw
his father rather frequently at the latter’s home in Sacra-
mento—probably four or five times a year. For some time
prior to 1929 his father had desired him to give up his
employment with the Remington Arms Company and take
over the management of his father’s affairs. The son had
put his father off. Finally, in June of that year he re-
ceived a letter from his stepmother as follows: ‘Your father
wishes me to write you that he is not able to write, let alone
go down to Oakland, and he would like to have you come
up.’ In response he went to Sacramento, where his father,
then eighty-seven years of age, insisted that he could no
longer put him off, else he would have to make other ar-
rangements, Edwin P. Stoll told his father that he would
assume the burden if he could be protected in the term of
his employment and his interest in the estate; which em-
ployment should continue until the decree of distribution
was signed. After consulting with his father’s counsel, and
after three different drafts of an agreement were submitted,
the following contract was signed:

‘‘«Mhis agreement, made and entered into this 26th day
of October, 1929, by and between E. P. Stoll, of San Fran-
cisco, California, party of the first part, and John T. Stoll,
of Sacramento, California, the party of the second part.

‘««Witnesseth: That the parties hereto are father and son:

“‘«That the party of the second part being advanced in
years desires the services of the first party to manage his
business and properties during the remainder of his life,
and thereafter until final distribution of the estate of said
second party has been made, upon the terms and conditions
hereinafter set forth;

“‘<That said first party is now employed at a salary of
$350 per month, and his interests are such that he cannot
afford to relinquish said position without assurance of such
employment as is herein provided, and this agreement is,
therefore, predicated upon such relinquishment of employ-

SS 2°:

ment by said first party and his employment, as herein
set out, by said second party.

“‘‘That in consideration of the foregoing said second
party agrees to employ, and said first party agrees to accept,
such employment for a period of time commencing upon
the Ist day of December, 1929, and ending with the final
distribution of the estate of the second party, as above set
forth, at a monthly salary of $350, payable monthly.

‘‘«That in consideration of the foregoing, first party
agrees to devote his entire time and his best ability to the
management, control and operation of the business and
property of said second party during said term.

“‘«That in further consideration of first party surrender-
ing his said position said party of the second part agrees
to take no action whatsoever that will in any manner reduce
the share of the estate of said second party to which first
party shall or would be entitled as an heir at law.’’’

“Edwin P. Stoll entered upon his employment as agreed
and continued therein for two years. On December 2,
1931, his father was adjudged incompetent and the Capital

> National Bank was appointed guardian of his estate. On
January 8, 1932, this action was commenced to have it
declared that the contract was terminated and to restrain
Edwin P. Stoll from interfering with the possession or
management by the guardian of the property of his father.
The first complaint was brought by the bank as guardian,
but an amended complaint was filed wherein John T. Stoll
appeared by the bank, the wife electing to join with the
plaintiff, and the other sons with the defendant. The prop-
erty consisted of three hotels, stores for thirteen or fourteen.
tenants, three ranches, and notes, etc., aggregating in value
at the time of the contract $350,000 or more, with a monthly
income of $1,800 or $2,000. Further, it was stipulated that
Edwin P. Stoll performed the terms of his contract, and
that there was no objection to his conduct of the position.

“Various contentions are advanced by appellants. They
complain that the action was commenced by the bank as
guardian, but of necessity their argument in this par-
ticular must be accorded no further consideration in view
of the amendment of the complaint to conform to the
recognized procedure. Their other propositions may be
included in the general problem of whether in the par-
ticular contract the power of the appellant Edwin P. Stoll

2

was coupled with an interest so as to prevent the termina-
tion of the contract by virtue of the provisions of section
2356 of the Civil Code, which reads: ‘Unless the power of
an agent is coupled with an interest in the subject of the
agency, it is terminated, as to any person having notice
thereof, by:

“1. Its revocation by the principal;

“© «2. His death; or

“ ©3. His incapacity to contract.’

“We have an unusual situation—a son sacrificing his
employment and chances of further preferment in order to
manage an aged father’s estate upon the assurance that his
employment shall continue until he receives his interest
therein, which, it is agreed, shall not by any act of the
father be reduced below that which he would take if his
father were to die intestate. ... We should have no hesi-
taney at all in declaring under the circumstances of the
ease, if John T. Stoll, possessed of all his faculties, were
attempting to revoke the employment of his son under sub-
division 1 of the above-quoted section that .... he would
be answerable in damages for such a breach. (Parke v. |
Frank, 75 Cal. 364-868 [17 Pac. 427]; Roth v. Moeller,
185 Cal. 415-418 [197 Pac. 62].) Nor can it be seriously
questioned that in the event of his father’s demise and the
fulfillment of his part of the contract by Edwin P. Stoll
he would be able to receive his share of the estate under
the contract. (Rogers v. Schlotterback, 167 Cal. 85 [138
Pae. 728]; Roy v. Pos, 188 Cal. 859-367 [191 Pac, 542].)?
These observations do not, however, solve our present
problem.

The general rule that an agency is always revocable,
and is revoked by operation of law in the event of death
or incapacity of the principal, is subject only to the excep-
tion that an agency or power coupled with an interest is
not so terminated. What constitutes an interest within the
meaning of this exception has not been made particularly
clear by the numerous and conflicting decisions dealing with
the subject. [J But all the decisions agree that an essen-
tial element of this irrevocable power must be a coexisting
interest in the subject of the agency. In Lane Mortgage
Co. v. Grenshaw, 98 Cal. App. 411 [269 Pae.: 672], the
agency was to manage’a hotel, and the agent had a twenty-
year lease of one floor, without rent. It was held that the

CE

agency was coupled with an interest—a present leasehold
estate in the property which was the subject of the agency.
The power was, moreover, a necessary means of protecting
the interest, for unless the building were properly managed,
a forfeiture of the basic land lease might result, which
would destroy the agent’s estate.

On the other hand, where no specific, present property
interest has been found, the courts have consistently held
the agency revocable, notwithstanding the fact that the
agent gave valuable consideration, and in spite of express
declarations in the contract that it was coupled with an
interest and irrevocable. (Boehm v. Spreckels, 183 Cal.
239 [191 Pae. 5]; Crossin v. Elysian Springs Water Co.,
105 Cal. App. 449 [287 Pac. 985]; Scott v. Superior Court,
205 Cal. 525 [271 Pac. 906]; Todd v. Superior Court, 181
Cal. 406 [184 Pac, 684, 7 A. L. RB. 988]; Kunz v. Anglo &
London Paris Nat. Bank, (1931) 214 Cal. 341 [5 Pac. (2d)
417]; McColgan v. Bonk of California, 208 Cal. 329 [281
Pae. 381, 65 A. L. R. 1075].)

HH Im the instant case it seems clear that despite the
obvious detriment suffered and benefit conferred by the
defendant, no present property interest passed to him by
the agreement. He was promised two things. The first
was a salary of $350 per month. This was, of course, not
an interest in the estate. Secondly, it was agreed that his
father would not reduce the amount of his expected in-
heritance. Here again, no present interest in the property
passed, but by the very language of the promise, he was
to get the interest only upon his becoming an heir, that is,
upon his father’s death. At most, this was an agreement
to leave property by will or by intestacy. The case of
O’Brien v. O’Brien, 197 Cal. 577 [241 Pac. 861], where the
defendant gave up a medical practice to manage plaintiff’s
property, and plaintiff agreed to devise certain land to him,
points out that the remedy in such a case is an action for

‘ damages. (See, also, O’Brien v. Perry, 180 Cal. 526 [62
Pac. 927]; In re Hayden’s Estate, 1 Cal. App. 75 [81 Pac.
668].) .

Such cases as Bridge v. Kedon, 163 Cal. 493 [126 Pae.
149, 48 L. R. A. (N. S.) 404], are not controlling here.
In that case the defendant made an assignment to plaintiff
of his expectant interest in the estate of his mother. The

2

court held that the assignment created a ‘‘present equitable
charge’’, enforceable as a contract to assign when the prop-
erty came into the hands of the heir. The court recognized,
however, that the right of plaintiff was purely contractual,
and that prior to the death of defendant’s mother, no prop-
erty interest passed.

Plaintiffs also urge two other serious objections to holding
this agreement irrevocable. Because of the conclusion we
have reached as to the character of the agency, we do not
deem it necessary to decide them.

Hl {t follows from the authorities considered that this
case does not fall within the rare class of irrevocable
agencies, and that the judgment of the court below, in so
far as it terminates the agency, is correct. Whatever right
the agent may have to recover damages or to protect his
expectant interest in the estate is not involved in this ac-
tion. We think, however, that the court was in error in
declaring the contract terminated. The contract not only
provides for the employment of defendant as agent, but
also contains the agreement not to reduce his expectant
share of the estate. If the consideration is adequate and
the contract otherwise fair and reasonable, and the defend-
ant is willing to perform and has not been guilty of any
improper performance, we see no reason why this part of
the agreement may not be valid and subsisting, and binding
on the estate of the incompetent. As far as the record
shows, defendant may pursue either or both remedies. But
since the case has been tried and appealed on the issue of
whether the agency was irrevocable, and no pleading or
proof of other matters was presented, they must be made
the basis of a separate action.

The judgment is modified by striking therefrom the
words ‘‘said contract’’, and substituting therefor the words
“the employment of Edwin P. Stoll’’, and as so modified,
it is affirmed.

Thompson, J., dissented.

Rehearing denied.

= 267

[Sac. No. 4773, In Bank—March 1, 1934.]
LISTON CLARK, Respondent, v. J. G. TAVARES, De-
fendant, and YOSEMITE PORTLAND CEMENT
CORPORATION (a Corporation), Appellant.

es
F, H. Pearson and Earl & Hall for Appellant.
J. Oscar Goldstein for Respondent.

PRESTON, J.—Respondent, plaintiff below, to secure
the fruits of a rescission in pais on a contract to purchase
shares of stock of the appellant corporation, sued the said cor-
poration and its stock sales manager, J. G. Tavares, for the
swum. of $6,000, representing the value of securities exchanged
by respondent for said stock, which transaction was alleged
to have been induced by fraudulent representations.

The complaint is in three counts and declares upon three
separate transactions: First, it alleges that on September
24, 1928, for 118 shares of class A stock of said corporation,
respondent gave in exchange 22 shares of the common
capital stock of the Pacific Gas and Electric Company.
Second, it alleges that on September 27, 1928, for 152
shares of class A stock of said corporation, respondent gave
in exchange 10 shares of the common capital stock of the
Pacific Telephone and Telegraph Company. Third, it al-
Jeges that on October 26, 1928, in part payment for 335
shares of class A stock of said corporation, respondent gave

268 PC |

15 shares of the stock of the Bank of Italy and supplied
the balance of the purchase price by giving a check for
$298.75.

The purchase price was $10 per share although the evi-
dence shows that the stock was offered as low as $6 per
share at the office of defendant stock sales manager. The
parties who directly perpetrated the fraud in the first two
instances above named were George F, Kenney and D. A.
Schlemmer, working together, and in the third instance,
A. Shapiro and B. L. Goldberg, working together. Schlem-
mer was the leading conversationalist in inducing the first two
purchases. He had been a sales manager of appellant, sell-
ing its cement products. The four men were working under
the immediate supervision and direction of defendant
Tavares, who made no defense to this action but defaulted
therein. .

The cause was put at issue and the court made findings
of fact and gave judgment in favor of respondent, giving
him the full relief prayed for and decreeing that the stock
of appellant corporation, having been deposited in court, be
held subject to the order of defendants.

Hi The only contention worthy of full discussion is that
the four representatives above named, who perpetrated the
initial fraud, were agents of the defaulting defendant,
Tavares, only, and were in no sense the agents of appellant.
Appellant bases its chief reliance upon the fact that in the
letter of authority to Tavares, it specified: ‘‘All salesmen
are to be and to remain your employees without any lia-
bility upon the part of this corporation or otherwise,’’ and
upon the further fact that the letter stated that commis-
sions on all sales were to be paid only upon receipt of the
eash from the selling price of the stock. To this should be
added the further contention that appellant did not receive
any of the proceeds of the securities converted nor did it
part with any of its treasury stock, but that orders of re-
spondent were filled from privately owned stock of others.

At the outset it should also be noted that in said letter
of authority above referred to, appellant reserved the right
to employ other salesmen and the court specifically found
that the persons making the fraudulent representations were
agents, servants and representatives of both appellant and
its co-defendant. Enough of the evidence will now be re-
cited to show that this finding is properly supported.

; PC 269

Appellant, in pushing its campaign to sell its treasury
stock, after securing the services of Tavares as stock sales
manager, printed and circulated extensive literature in
which it vouched for Tavares as its stock sales manager.
A copy of this literature was specially mailed to respondent,
among others in the community in which he resided, of.
which fact he had Imowledge. In this literature appellant
specifically named the above agent, Schlemmer, as its sales
manager, using the following language: ‘‘D. A. Schlem-
mer, Sales Manager. One of the most successful sales ex-
ecutives in the industry; for 10 years with the Nicolson
Syndieate Mills of Kansas; subsequently sales and traffic
manager of the California Portland Cement Company of
Los Angeles.’? As already noted, respondent states that
this man made the first misrepresentations to him. Also,
prior to call upon respondent of any of the agents, he
received direct from appellant a communication over the
signature of appellant’s president, ‘‘An invitation to be-
come associated with them in the ownership and earnings
of the corporation’’. This invitation bore a serial number
and, among other names appended to it, was that of ‘‘D. A.
Schlemmer, Director of Sales’’.

The nature of the fraud practiced upon respondent need
not be dwelt upon as it is conceded that the evidence sup-
ports the conclusion of the court below that material mis-
representations of fact were made to respondent, which in-
duced the purchase in each instance. When these agents
called upon respondent, they had order blanks of appellant
numbered serially. Respondent, in making each purchase,
signed one of these applications. They were addressed to
the company itself and also bore the following: ‘‘ Yosemite
Portland Cement Corp., J. C. Tavares, Securities Dept.
(Signed) George F. Kenney, Agent’’ and ‘‘Make all checks
payable to Yosemite Portland Cement Corporation.’’? The
serial number of the first one executed by respondent to
appellant was No. 7998. On the very day it was signed,
order No. 7997 was signed by one Crippen, and the records
of appellant show that the salesmen who conducted the
latter sale were Geo. F. Kenney and D. A. Schlemmer. The
records of appellant also show that correspondence occurred
between said Crippen and the corporation respecting this
subscription. Likewise, in the stock sales record of appel-
lant, the names of George F, Kenney, D. A. Schlemmer,

270 | 7

A. Shapiro and Goldberg & Shapiro, appear in a number
of instances, showing that appellant knew of their activities
and in many instances ratified their acts. Said records also
show that numerous sums as commissions were paid to
Tavares on subscriptions taken by these men. It is also
significant that in procuring the shares of stock to deliver
to respondent, use was made of shares standing in the name
of the secretary of Tavares, one B. Sperry, and also stand-
ing in the name of H. J. Redgrave and C. R. Cobb. None
of these parties appeared as witnesses. The name of Sperry
was known to the corporation as the secretary of Tavares.
The names of the other parties were unknown to it and it
had no addresses by which to locate them. Not only this,
but none of the four agents who perpetrated the fraud was
produced by appellant, nor was Tavares. The corre-
spondence between Tavares and respondent, introduced in
evidence, shows clearly that treasury stock was purported
to be delivered to respondent in each instance. In other
words, Tavares confirmed, and aided by concealment, the
fraud practiced upon respondent by the other agents.

The company knew or should have known that neither
Tavares nor his secretary owned any stock of the corpora-
tion and should also have taken heed as to whether the
addresses of the above-mentioned parties were noted on its
books. The court was warranted in believing that the whole
transaction was one to circumvent the provisions of the
permit which required sales to be for cash and did not con-
template an exchange of stock for the valuable securities of
respondent. Why should numerous cash sales by these
agents have been properly noted on the books of appellant
while the transactions with respondent were not so noted?

The facts fully justified the court below in holding that
said four named persons were agents of both appellant and
defendant Tavares. It is also clear that the fraud practiced
by them was committed in and as part of the transaction of
the business of appellant (sec. 2338, Civ. Code; Otis
Elevator Co, v. First Nat. Bank, 163 Cal. 31, 39 [124 Pac.
704, 41 L. BR. A. (N. 8.) 529]; Johnson v. Monson, 183 Cal.
149, 151 [190 Pac. 685]; Ruppe v. City of Los Angeles, 186
Cal. 400, 402 [199 Pac. 496]).

It is not necéssary to determine whether this cause is one
on the law or the equity side of the court; if the former,
it was properly appealable to the district court of appeal.

ee En

In order to avoid any possible question in this connection
the cause has been regularly transferred to this court for
decision.

A consideration of the merits renders the motion to affirm
a moot question and, accordingly, it is denied. The judg-
ment is affirmed.

Langdon, J., Shenk, J., Thompson, J., Waste, C. J., and
Curtis, J., concurred.

Rehearing denied.
a

[Sac. No, 4737. In Bank—March 1, 1934,]
STUART S. HAWLEY, Respondent, v. RECLAMATION

DISTRICT No. 730, Defendant; EMMA SNOWBALL
et al. Interveners and Appellants.

[Sac. No. 4738. In Bank—March 1, 1934.]
H. W. MEEK ESTATE INCORPORATED (a Oorpora-
tion), Respondent, v. RECLAMATION DISTRICT No.

730, Defendant; EMMA SNOWBALL et al., Inter-
veners and Appellants.

[Sac. No. 4739, In Bank—Mareh 1, 1934.]

RIVER FARMS COMPANY OF CALIFORNIA (a Cor-
poration), Respondent, v. RECLAMATION DISTRICT
No, 730, Defendant; EMMA SNOWBALL et al, In-
terveners and Appellants.

[Sac. No. 1470. Tn Bank.—March 1, 1984]
*KNIGHTS LANDING RIDGE DRAINAGE DISTRICT,
Respondent, v. RECLAMATION DISTRICT No. 730,
Defendant; EMMA SNOWBALL et al., Interveners and
Appellants.

*Reporver’s Nors—A rehearing im the case of Knights Landing
Ridge Drainage District v. Reclamation District No. 730 was granted
by the Supreme Court on March 29, 1934,

SS ~:

Devlin & Devlin & Diepenbrock and H. B. Wulff for
Appellants,

Arthur C. Huston, Jr., Stephen W. Downey, Downey,
Brand & Seymour and Frederic P. Pierce for Respondents.

WASTE, C. J—Reclamation District No. 730, one of
the defendants in these consolidated cases, was organized
in 1902 under the provisions of the Political Code applicable
to the formation of reclamation districts. In 1907, an
assessment (the first) was levied under a plan which called
for the ‘‘raising’’ of a levee along the Sacramento River
which apparently was in existence when the district was
formed. In 1909, a new (second) assessment was spread
under plans for securing additional rights of way for the
district’s levee system, to further raise the river levee, and
to provide for a district drainage system.

Thereafter, in 1911, the Sacramento Valley flood control
plan was‘ adopted (Stats. 1911, Ex. Sess., chap. 25, p. 117).
Pursuant to, and as a component part of this comprehensive
plan, the Knights Landing Ridge Drainage District was
formed for the purpose of constructing a canal or cut to
carry overflow, drainage, and ‘“‘run-off’’ waters from Colusa
basin, on the north, through and over the territory embraced.
in Reclamation District No. 780, to the Yolo by-pass, on
the south. The drainage district embraces within its bor-
ders Reclamation District No. 730 and other territory, none
of which lands could be successfully reclaimed without the
construction of the canal. Its construction, to which the
Reclamation District No. 730 gave consent, divided that
‘district into two approximately equal parts, the easterly
unit lying between the canal and the levees along the Sacra-
merito River. The lands of these plaintiffs are situated in

the westerly unit of the reclamation district. The canal,
or cut, is a surface canal of sufficient proportions to give
it a capacity of 20,000 cubic feet per second, and is pro-
tected by a levee of substantial construction and dimensions
on either side.

In 1917, and after the canal and its protecting levees
were constructed, Reclamation District No. 730 adopted
another (third) plan calling for bringing the district’s river
levee up to specifications required by the general flood
control plan, supra. Two drainage systems—one for each
side of the canal—were included in the contemplated im-
provement. Pursuant to the statutory requirements, as-
sessors to determine the benefits were appointed in 1918
to spread an assessment amounting to $110,386 on the lands
in the district. They did so, assessing for the drainage
systems separately, the east side of the district paying for
the east side drainage works, and the west side paying for
the west side works. The cost of raising the river levee was
charged eighty per cent to the lands constituting the east
side, and twenty per cent to the west side. The work was
done, and a considerable portion of the assessment was paid,
but a large deficiency remained, for the payment of which,
and for certain other purposes, a fourth assessment, the
one here in question, was levied. Included in this assess-
ment, which amounted to $225,000, was $108,414.23 for
work on the river levee, and $98,606 for deficiencies under
the 1918, or third, assessment.

Assessors, who appear from the record to have been
experienced and qualified experts, well acquainted with the
various projects concerned, viewed the lands affected,
studied the plans for the work, and in 1928 spread a supple-
mental assessment (the fourth) according to their estimates
of the benefits derived. They unanimously spread the as-
sessment for the river levee improvement eighty per cent
to the east side, and twenty per cent to the west side, assess-
ing for certain expenditures authorized by the plan on the
two drainage systems separately. In other words, in de-
termining the benefits, these assessors arrived at the same
results as did the commissioners who spread the original
assessment of 1918. As will later appear, the determination
of the benefits by these assessors is the same determination

Ss

of benefits later approved by the court in its findings and
in support of its judgment, which gave rise to these appeals.

When presented to the hoard of supervisors, as provided
for in section 3456 of the Political Code, that board, after
objections filed and hearings had, directed that the assess-
ment of $108,414.28 for work on the levee be modified and
“‘yeapportioned in accordance with the benefits derived
therefrom’’, and that ‘‘fifty-five per cent (55%) thereof be
levied and assessed against the lands lying east of the cen-
ter of the Knights Landing Ridge Drainage District Canal,
and that forty-five per cent (45%) thereof be levied and
assessed against the lands lying west of the center of the
Knights Landing Ridge Drainage District Canal’. Fol-
lowing the final order approving and establishing the assess-
ment as re-apportioned, the actions authorized by section
8456 of the Political Code and now here on appeal were
commenced in the superior court. The plaintiffs, other than
Knights Landing Ridge Drainage District are parties own-
ing lands on the west side of Reclamation District No. 730.
Their purpose is to cancel and annul the assessment (No.
4) as reapportioned by the board of supervisors, and to
have their property in Reclamation District No. 730 assessed
according to the actual benefits derived by the lands by
reason of the works of reclamation and drainage called for
by the plan for additional and supplemental works leading
to the assessment. The Knights Landing Ridge Drainage
District, the other plaintiff, contends that it has derived
no benefit, and also that any assessment against it in the
premises is without authority of law and is null and void.
Reclamation District No. 730 was made the defendant to the
actions, for the reason that it represented all the land
owners in the district. A number of land owners on the
east side of the reclamation district intervened in support
of the defendant district and the legality of the supple-
mental assessment as approved by the board of supervisors.
After a comprehensive hearing, at which considerable evi-
dence was introduced and many exhibits submitted, the
trial court made findings to the effect that the board of
supervisors acted arbitrarily and abused its discretion in
making and approving the assessments, and as already
noted, fully supporting the contentions of the plaintiffs
that the assessments complained of exceeded the benefits

ae

derived from the work. Judgment was entered in their
favor. A new trial was denied, and the interveners appeal
from the judgment.

It was the contention of the respondents, other than the
Knights Landing Ridge Drainage District, in the court
below, and is here, that their lands on the west side of the
Knights Landing Ridge Drainage District canal and levees
received no benefit from the work on the river levee, be-
cause if that levee should break and the east side of the
reclamation district be flooded, the waters would flow: out
of the district over its south levee and into the Yolo by-pass
without endangering the two strong levees of the Knights
Landing Ridge cut, and without reaching or imperiling the
west side lands. There was much evidence to support this
contention. Testimony supporting a contrary contention
advanced by the interveners only served to raise a contra-
dictory situation in the evidence, which the trial court de-
cided in favor of the plaintiffs’ cause. We therefore deem
it unnecessary to dwell on the facts brought out in support
of the respective contentions of the parties. The only
result would be to emphasize the correctness of the court’s
findings on the question of the lack of benefits to plaintifis’
properties. .

| | That the superior court had complete jurisdiction
to entertain and to proceed and hear the causes of the
plaintiffs is determined by the provision in section 3456 of
the Political Code, which provides that: ‘‘Any person ag-
grieved by the decision of the board of supervisors may
commence an action in the superior court of the county in
which the greater part of the said district is situate, to have
said assessment valuations corrected, modified or annulled.’’
In the cases here, the judgment corrected and modified the
assessments levied on plaintiff land owners’ lands by re-
ducing the amounts approved by the supervisors to the
amounts originally fixed by the assessors, declaring the
amount of the assessments in excess of the assessments as
modified to be illegal and invalid, and annulling them to
that extent. We find nothing in the judgment exceeding
the power the court is given by the statute. | | The inter-
veners, who are the only appellants here, may not complain
that they have not had their day in court, for, in addition
to being represented by the district, which answered and de-

eee LL

fended the actions, they intervened as defendants to resist
the claims of the respective plaintiffs, and were actual and
active parties to the actions in court.

That the superior court sitting in these cases had
jurisdiction, and that it acted judicially and not in any
legislative capacity is well established by the decisions of
the courts of this state. It had jurisdiction and power to
determine for itself whether, and to what extent, the land
owners before it had “been benefited by the works of reclama-
tion covered by the assessment in question, and had power
to declare an assessment invalid in so far as it purports to
ereate a charge against their lands. (Reclamation Dist. 108
vy. Evans, 61 Cal. 104.) In Richardson v. Browning, 61
Cal. App. 110 [214 Pac. 281], the court held that in enact-
ing in section 3462 of the Political Code a provision for a
court action like that provided in section 3456, supra, it was
undoubtedly the purpose of the legislature to provide an
exclusive remedy for the land owner against an excessive or
illegal assessment. Therein a tribunal is designated [the
board of supervisors] for the hearing and determination
in the first instance of any objection that might be made
by a land owner, and in case of an adverse decision an
action may be brought in the superior court to correct or
annul the assessment, The benefits that are derived are
questions of fact to be determined by the district in the
first instance and finally by the trial court. (Hershey v.
Reclamation Dist. 108, 200 Cal. 550, 571 [254 Pac. 542].)
In Abel v. Reclamation Dist. 2047, 201 Cal. 451 [257 Pac.
504], this court held actions like those now here to be
judicial. At page 455, the court said: “‘Much must be left
to the sound judgment and discretion of the officers ap-
pointed by law to determine the question of benefit in
reclamation and drainage matters and finally to the court
which makes a judicial review of the proceedings.’’ (Italics
supplied.) The court, in determining questions relating to
the proper apportionment of the assessment, was acting
judicially. (In re Sutter-Butte By-Pass Assessment, 190
Cal. 582, 588 [218 Pac. 974]; see, also, Athearn vy. Nicol,
187 Cal. 86, 95 [200 Pae. 942].)

HM It is contended by the appellants that the court
below had no power or jurisdiction to change the assessment
levied against any tract of land in the district, or to re-

23 es

apportion the entire assessment. We do not interpret the
judgment as doing more than reducing the assessments in
question to correspond with the benefits accruing in each
case, and declaring the excess invalid and void. By such
action it has corrected the assessments under the power
conferred by the section (8462, supra), but has gone no
further. It has not attempted to re-apportion the old, or to
levy or spread a new assessment. If that is to be done,
Reclamation District No. 780 must do it. Section 34661 of
the Political Code (the first section bearing that number)
provides that in all cases in which an assessment levied for
reclamation purposes upon lands embraced within a district
is thereafter adjudged invalid by any court of competent
jurisdiction, or shall be adjudged invalid as to any tract
or tracts of land within such district, a new assessment may
be levied on the lands of the district in the form and
manner provided by the section. Such subsequent assess-
ment, or new assessment, shall be made by commissioners
appointed by the board of supervisors, as provided in sec-
tion 3456 of the same code, and must be made and approved
in the same manner as other assessments. The judgment of
the court in these cases does not purport to do what ‘‘officers
appointed by law’’ must do. .
Hl Finally, the appellants urge the contention that
the presence of the eut and canal banks (the latter consist-
ing of the two substantial levees or retaining walls already
referred to) of the Knights Landing Ridge Drainage Dis-
trict must be ignored in spreading or equalizing the sup-
plemental assessment. Therefore, they claim, the court’s
judgment, predicated in part on the fact that the canal
and banks protected the west side lands of respondents,
thereby lessening the danger of floods in case of the break-
ing of the river levee, was erroneous. The canal and accom-
panying works were completed years before the assessment
was levied. The statute requires that the commissioners
shall apportion the assessment ‘‘according to the benefits
that will acerue to each tract of land in said district, re-
spectively, by reason of, the expenditure of said sum of
money’’. (Pol. Code, sec, 3456.) This means that existing
conditions of the land at the time of the assessment should
be taken into consideration. (Reclamation Dist. 537 v.
Burger, 122 Cal. 442, 447 [55 Pac. 156]; Reclamation Dist.

©:

108 v. West, 129 Cal. 622 [62 Pac. 272]; Riverdale Reclama-
tion Dist. 805 v. Shimmin, 24 Cal. App. 595 [141 Pace.
1070}.) Benefits to be derived from reclamation works are
to be measured by the degree of protection such work
affords from the menace of floods. Such benefits are those
only which spring from the system of works which such
assessment is levied to construct or maintain. (Reclamation
Dist. 108 v. West, supra.) Shortly after Reclamation Dis-
trict No. 730 gave consent to and authorized the construc-
tion of the canal by the drainage district, and the canal was
constructed, the district, in spreading the third assessment,
that of 1918, to cover the costs of raising the river levee,
took into consideration the presence of the canal and works.
It was proper to do so again when it came to levy the
present, or supplemental, assessment.

Appellants have attacked the judgments from many
points of view, along many lines of argument, and angles
of approach. We have given due consideration to what we
deem the important questions raised by the appeals in the
cases instituted by the plaintiff land owners of the west side.
The judgments in their favor, and each of them, should be
affirmed.

The judgments in the three land owners’ cases (Sac. Nos.
4737, 4788 and 4739) are, and each is, affirmed.

Curtis, J., Langdon, J., Preston, J., Shenk, J., and
Thompson, J., concurred.

[Sac. No. 4652, In Bank—March 1, 1984]

CALIFORNIA GRAPE CONTROL BOARD, LTD., Re-
spondent, v. BOOTHE FRUIT COMPANY (a Cor-
. poration), Appellant.

Dennett & Zion for Appellant.

Agnew & Boekel, Hawkins & Hawkins and John D. Galla-
her for Respondent.

PRESTON, J.—The plaintiff, a co-operative marketing cor-
poration, organized under the laws of California for the
purpose of securing the benefits of the Federal Agricultural
Marketing Act, caused to be grouped together in the year
1980, a large percentage of the grape acreage of California,
by securing the signatures of the owners of such acreage to
a uniform marketing agreement constituting it their selling
agent. One Swanson, a signatory to such uniform agree-
ment, had a grape yield on his acreage in Stanislaus County,

2:

for the year 1980, of about 100 tons. In September, 1930,
through his agent, one Paulson, he sold the said grapes on
the vines to plaintiff. A down payment on the purchase
price was made and conspicuous notices of purchase were
posted throughout the vineyard. Later, payments were com-
pleted to Swanson himself. [J The authority of the agent
to sell was put in issue by defendant in this action, but the
question of want of authority of said agent, if such defense
were sustained, would be immaterial as the sale was specially
ratified by the owner who, as above noted, personally re-
eeived, without protest, the balance of the purchase price
and, moreover, expressly approved the contract of sale after
it was made by the agent.

The Boothe Company, a corporation (defendant here),
had as its president and manager D. P. Boothe, who resented
the policy, purposes and operations of plaintiff. Admittedly
with full knowledge of the claims of ownership of plaintiff
to said vineyard, said corporation, through its president,
entered upon the lands of said Swanson and picked some
47 tons of said grapes, carried them away and converted
them into raisins, which were marketed for its own benefit.
Plaintiff’s complaint here against said Boothe Company as
defendant was cast in three counts. First, it sought an
injunction against further depredations upon said vineyard
by defendant; second, it stated a cause of action for claim
and delivery and, third, it contained a plain count for con-
version of personal property. It further alleged that the
act of defendant was prompted and executed by fraud,
malice and oppression and prayed for exemplary damages.
The answer of defendant was a general and special denial.
The case was tried upon the conversion count alone, the
other two counts apparently being abandoned by plaintiff.
The court made findings for plaintiff upon said count, fixing
the value of the property converted at $387 and assessing
exemplary damages against defendant in the sum of $100.
Defendant appealed. We can find no merit in the grounds
urged for reversal.

i | There is in the record ample evidence of malice and
oppression on the part of said D. P. Boothe, who openly
defied the rights of respondent as owner of the property and
condemned its purposes in its efforts to stabilize the grape
industry. In other words, what he did was done wilfully

252

with the firm intention of injuring and crippling the effec-
tiveness of respondent. These acts of defendant’s president
and manager were imputable to the corporation (Lowe v.
Yolo County etc. Water Co., 157 Cal. 503 [108 Pac. 297]).

HM fhe claim that respondent suffered no damage
because it intended to violate the state law by allowing the
grapes to waste on the vines, clearly cannot be relied upon
by appellant. The property belonged to respondent; appel-
lant converted it. How respondent obtained it or what use
it intended to make of it, can be no justification for the acts
of appellant. Property rights are not administered ac-
cording to speculation as to the purpose for which the prop-
erty is intended to be used.

In Marland Ref. Co. v. Duffy, 94 Okl. 16 [220 Pac. 846,
35 A. L. R. 52], it is said: ‘‘The weight of authority estab-
lishes the rule of law that one who does an unlawful act is
not thereby placed outside of the protection of the law, but
that, to have this effect, the unlawful act must have some
causal connection with the injury complained of .. . ”’ See,
also, Matta v. Katsoulas, 192 Wis. 212 [212 N. W. 261, 50
A. L. R. 291, and note p. 298].

Hl The court under section 3336 of the Civil Code, gave
to respondent the value of the property converted and the
market value of said property was properly used as a basis
for this award.

The judgment is affirmed.

Waste, C. J., Shenk, J., Thompson, J., and Curtis, J.,
concurred.

[S. F. No. 14953, In Bank—March 1, 1934]

THE MUTUAL BUILDING AND LOAN ASSOCIATION
OF LONG BEACH (a Corporation), Respondent, v.
AUGUSTA CORUM et al., Appellants.

| ill

284

George D. Collins, Jr., and Alfred J. Hennessy for Appel-°

Jants.

Fitzgerald, Abbott & Beardsley, Herbert C. Jones and
Jones & Douglas for Respondent.

CURTIS, J.—This is an appeal by the defendants, upon
the judgment-roll and a bill of exceptions, from the final
judgment in favor of the plaintiff, in an action at law to
recover a deficiency judgment in the sum of $28,474.83,
claimed to be the balance due the plaintiff on a promissory
note executed by the defendants, after crediting upon the
note the proceeds of a sale by the trustees under a trust deed
given as security for the payment of the note. The note,
which was for $65,000, was executed by the defendants on
November 21, 1925, to the ‘‘Mutual Building and Loan Asso-
ciation of San Jose and College Park’’, as payee. The deed
of trust securing the note was executed concurrently with the
note by the appellant, Augusta Corum, as trustor, to the

lr

trustees therein named, and named as beneficiary, ‘California
Mutual Building and Loan Association’. The name of the
corporation named as payee in the promissory note had
previously, on November 29, 1924, been changed by a decree
of the Superior Court of Santa Clara County to ‘California
Mutual Building and Loan Association’. On February 2,
1927, the note -was indorsed by the California Mutual Build-
ing and Loan Association to plaintiff. On April 4, 1930,
the property described in said trust deed was sold by sub-
stituted trustees to plaintiff for $50,000, and there being a
claimed deficiency of $28,474.83, plaintiff commenced this
action for said amount. The defendant Corum filed an
answer and cross-complaint. By the cross-complaint she
sought to set aside and vacate the sale upon the ground that
said sale was illegal and void. A demurrer to the cross-
complaint was sustained, and upon the refusal of cross-com-
plainant to amend, judgment was rendered for the plaintiff
as to the cross-complaint. On September 28, 1931, plaintiff
served upon defendants’ attorneys a memorandum to set
the cause for trial, as required by rule I of the rules adopted
by the Judicial Council of California regulating the business
of the superior court, and filed the same with an affidavit
of service with the clerk of the court. On December 31,
1931, defendant Corum served and filed a written demand
for a jury trial. On January 4, 1932, the date when the
cause came before the presiding judge for the purpose of
fixing a definite date for the trial of the case, defendant
Corum demanded in open court a jury trial of the case, she
having previously deposited the necessary jury fees. The
demand was denied, and the cause was set for January 28,
1932, for trial without a jury. The trial came on for hear-
ing on said date before the court without a jury, and judg-
ment was entered in favor of plaintiff.

| | Appellant claims that the denial to her of a jury
trial constituted reversible error. She contends that she did
not waive her right to a jury trial because she had complied
strictly with the requirements of section 631 of the Code of
Civil Procedure which specifies the manner in which a jury
trial may be waived by a party. Respondent contends that
appellant waived her right to a jury trial by noncompliance
with rule I of the rules adopted by the Judicial Council of
California regulating the business of the superior court

256

(hereinafter referred to as rule I). It is respondent’s posi-
tion that although rule I does not prescribe a waiver for
noncompliance therewith, said rule was enacted by the Judi-
cial Council to clarify and make more definite the provisions
of subdivision 4 of section 631 of the Code of Civil Pro-
cedure, which does prescribe a waiver for failure to comply
with its provisions, and that a noncompliance with rule I
is ipso facto a noncompliance with subdivision 4 of section
631 of the Code of Civil Procedure. In other words, it is re-
spondent’s theory that rule I is consistent with and in con-
formity with said section, 631, that the requirements are iden-
tical and the time specified in each for the making of a demand
for a jury trial is the same. Appellant’s position is that
rule I prescribes other and different requirements than does
section 631 of the Code of Civil Procedure, and that the time
specified in said code section as the proper time to make a
demand for a jury trial is different from and subsequent
to the time specified in rule I, and that a demand made at the
time specified in section 631 of the Code of Civil Procedure,
effectively preserves a litigant’s right to a jury trial, irre-
spective of whether such litigant has failed to fulfill the
requirements of rule I. Appellant concedes that perhaps
a compliance with rule I may be sufficient to prevent a
waiver of the right to a jury trial, but points out that
under her theory the question of whether it does or does
not is not here involved, but merely the question of whether
her demand satisfactorily fulfilled the requirements pre-
scribed by section 631 of the Code of Civil Procedure.

There can be no doubt that the defendant failed to com-
ply with rule I. In fact, it is expressly conceded that she
did not. Rule I provides that, ‘‘For the purpose of setting
a civil cause for trial, there shall be filed by a party to the
cause a memorandum which shall state that the cause is at
issue, and which shall set forth the number and title of the
cause, the nature of the cause, the time estimated for the
trial thereof, whether a jury trial is demanded, and the re-
spective names, addresses, and telephone numbers of the
attorneys for the respective parties. Prior to the filing
thereof, a copy of said memorandum shall be served upon
the attorneys for all parties, and unless admission of service
is indorsed upon the memorandum filed, the same shall be
accompanied by an affidavit showing such service. No cause

CE

shall be set for trial unless the memorandum herein men-
tioned shall have been served and filed; provided, however,
in the event the cause shall be set upon stipulation, the latter
shall be accompanied by a corresponding memorandum. In
ease a jury trial is not demanded by the party filing such
memorandum, any other party to the cause desiring a jury
trial shall have five (5) days, after service of such memo-
randum, within which to file and serve his written demand for
a trial by jury.’’ Subdivision 4 of section 631 of the Code of
Civil Procedure, provides that a trial by jury may be waived
by a party ‘‘by failing to announce that a jury is required,
at the time the cause is first set upon the trial calendar
if it be set upon notice or stipulation, or within five days
after notice of setting if it be set without notice or stipula-
tion.’””

The controversy therefore resolves itself into a question
of the proper interpretation of subdivision 4 of section 631
of the Code of Civil Procedure. Just what does the lan-
guage, ‘‘at the time the cause is first set upon the trial cal-
endar’’ mean? Does it mean, as respondent contends, at
the time the memorandum to set the cause for trial is first
filed with the clerk of the court as required by rule I? Or
does it mean, as contended by appellant, at the precise time
the case first comes before the judge to be set for trial at a
definite, fixed future date?

We are of the opinion that the language used in section 631
of the Code of Civil Procedure, ‘‘at the time the cause is first
set upon the trial calendar’’ is synonymous with the words,
“at the time the case is set for trial’. In matters of court
procedure it is most important that the steps to be taken
should be easily ascertainable and readily understood and
that the rights of clients to jury trials, or other aids to the
administration of justice, should not be jeopardized by a
strained construction of a statute prescribing judicial prac-
tice and procedure. A strained construction should, there-
fore, be avoided and the words given the meaning they com-
monly convey.

Prior to the very existence of the Judicial Council and
prior, of course, to the promulgation of rule I, it was as-
sumed and taken for granted that the time specified in subdivi-
sion 4 of section 631 of the Code of Civil Procedure, at which
a demand for a jury trial must be made if the right to a

2:

jury trial was to be protected and preserved, was at the time
a definite date was assigned.by the presiding judge for trial.
(Hertter v. Addis, 89 Cal. App. 160 [265 Pac. 298, 300].)
In that case some time prior to December 6, 1922, the case
‘“was set down for trial’, at which time the appellants
demanded a jury trial. The question involved in that case
was whether a noncompliance with certain rules of court
operated as a waiver of a party’s right to a jury trial in
the absence of a provision in such rules that such noncom-
pliance would constitute a waiver thereof, provided said party
had complied with the provisions of section 631 of the Code
of Civil Procedure. The court there held such noncompli-
ance did not operate as a waiver, and in so holding said,
referring to the proper payment of jury fees and to the
demand for a jury trial having been made in the proper
manner on the date of the setting of the cause for trial, “It
is apparent that appellants’ rights to a trial by jury were
not waived in any of the manners provided by the section
from which we have just quoted.’? (Sec. 631, Code Civ.
Proc.) Since that decision other cases have accepted this
construction as the true one and have postulated their con-
clusions upon the premise that the time ‘‘the cause is first
set upon the trial calendar’’ is synchronous with the time
“the case is first set for trial’’. (Hoffman v. Southern Pac.
Co., 101 Cal. App. 218 [281 Pac. 681], Stern v. Hillman, 115
Cal. App. 156 [800 Pac. 672], McGregor v. Wright, 117 Cal.
App. 186 [8 Pac. (2d) 624], and Dunham v. Reichlin, 217
Cal. 289 (18 Pac. (2d) 664].) In Hoffman v. Southern Pac.
Co., supra, the court in holding that a demand for a jury
trial sufficed to preserve the party’s right to a jury trial
upon the second trial of the case, was referring to a demand
made on October 24, 1927, on which date, ‘‘the case was set
for trial’, The record in the case of Stern v. Hillman,
supra, shows that the point was made by the respondent
there as here that the cause was first set upon the trial
ealendar when the clerk filed the memorandum and that
appellant had waived his right to a jury trial because he
had failed to file his written demand for a jury trial within
five days after the service upon him of the memorandum.
In that case, the court declined to consider the question at
all of whether appellant had or had not waived a right to
a jury trial by a failure to comply with the provisions of

rE

rule I, and after pointing out that the written demand by
appellant for a jury trial was made two days prior to the
time when the cause came before the judge to have a definite
date assigned to it for trial, held that inasmuch as appellant
did not, on the day the case came up to be set for trial,
announce that a jury trial was demanded, he had by such
noncompliance with code section 681 of the Code of Civil Pro-
cedure, waived his right to a jury trial. In McGregor v.
Wright, supra, the appellant had failed to comply with the
provisions of rule I and also had failed to be present and
demand a jury trial on February 17, 1930, the date the cause
was set for trial for March 14, 1930. The court there held
that a jury trial might be waived, ‘‘by failing to announce
that a jury trial is required at the time the cause is first
set for trial if set upon notice’. In Dunham v. Reichlin,
supra, the court in holding that each party must make a
proper demand for a jury and one party is not entitled to
rely upon the demand made by the opposing party, stated
that on August 15, 1930, ‘‘the cases were put upon the
trial calendar’? and later that ‘‘on August 15, 1930, the cases
were first set upon the trial calendar to be tried on October 6,
1930”’, thereby obviously construing section 631 of the Code of
Civil Procedure, as referring to the fixing of a definite date
for trial rather than the filing of the memorandum to set
the cause for trial with the clerk. It is apparent that this
is the construction commonly given to this code section by
the bench and bar, and the fact that this meaning has been
so unhesitatingly accepted as the true meaning is a cogent
argument for holding that it is the correct one. In Stern
v. Hillman, supra, the court in holding that the appellant
had waived his right to a jury trial by failing to demand a
jury at the time the case was set for trial for a definite
future date and immediately following a direct quotation of
subdivision 4 of section 631 of the Code of Civil Procedure, |
said, ‘‘the language clearly fixes the time, place and manner
of demanding a jury trial. Since the language is unam-
biguous and certain, there is no need for construction or in-
terpretation.’’

Moreover, we are of the opinion that a consideration of
the rules in their entirety, adopted by the Judicial Council
for the regulation of the business of the superior court, will
indicate that the filing with the clerk of the memorandum

P|

20

to set a cause for trial is not a setting of the cause upon the
trial calendar. Rule II provides that the clerk shall prepare
a list of all civil cases not yet set for trial and wherein a
memorandum to set the same has been served and filed,
and shall on the same day post a copy of said list in a
conspicuous place in his office, where the same may be avail-
able for examination by attorneys. Said list shall be known
as the ‘Civil Active List’’, Rule III, which is applicable
to Alameda County, provides that thereafter on certain
designated days, ‘‘there shall be set for trial under the
supervision of the Presiding Judge, during the next suc-
eeeding calendar month, as many civil cases as can reason-
ably be disposed of by the Court during said period’.
The cases thus set shall be taken from the ‘‘Civil Active
List’’. The superior court shall cause to be published on
the day next following every setting of causes for trial,
in a newspaper of general circulation published at the
county seat, a list of all cases thus set for trial. On the
same day, the clerk shall- cause a copy of said list to be
posted in a conspicuous place in his office, where the same
may be available for examination by attorneys. Said last-
mentioned list shall be known as the ‘‘Civil Trial List’’.
Rule XXIII provides that, ‘‘all civil causes shall be set for
trial upon the calendar of the department of the Presiding
Judge’. Obviously, in these rules, the ‘‘setting’’ of a cause
means the fixing of a definite future date by the order of
the presiding judge for the trial thereof, and the time
therein when a cause is ‘‘set for trial’ is the time when the
cause comes up to have a future date fixed and assigned by
the judge for the hearing of said cause.

Respondent points out that the code section does not say,
at the time the cause is ‘‘first set for trial’, but does say
at the time the cause is “‘first set wpon the trial calendar’,
and insists that the ‘‘trial calendar”’ is not the ‘‘Civil Trial
List’? referred to in rule III, but is composed of both the
“Civil Active List’? and the ‘‘Civil Trial List’. We can-
not agree. The Civil Active List is prepared by the clerk
only once a month and it may well happen that a con-
siderable number of days may elapse between the filing of
the memorandum to’ set and the preparation by the clerk
of the ‘‘Civil Active List’’. If the case is first set upon
the trial calendar, as claimed by respondent, at the time

Se 2

of the filing of the memorandum to set with the clerk, the
Civil Active List is not yet then in existence, and if the
‘trial ealendar’’ consists of the ‘‘Civil Active List’? and
‘Civil Trial List’’, of necessity the ‘‘trial calendar’’ is not
yet in existence. Moreover, since subdivision 4 of section 631
of the Code of Civil Procedure, was enacted in 1915, and
rule I was not promulgated until 1929, it is plausible to
suppose that the term, ‘“‘trial calendar’’ referred to in the
code section referred not to some calendar to be devised in
the future, but to the calendar in existence, the calendar
upon which the cases were set down for trial for a certain
definite future date. To hold that the language, “‘at the
time the cause is first set upon the trial calendar’’ refers
to the filing of the memorandum to set with the clerk
requires us to define the verb ‘‘to set”’, commonly under-
stood in legal parlance as the fixing by the court by an
order of the judge of a definite future date for the trial
of an action, as meaning ‘‘to file with the clerk’’ the memo-
randum to set. It also leaves us in doubt as to what is
meant by a ‘‘trial calendar’’. Other difficulties might be
pointed out to an acceptance of the construction claimed by
respondent for section 681 of the Code of Civil Procedure,
but these we think are sufficient.

The action being one to recover a money judgment
on a balance alleged to be due on a promissory note, the de-
fendant was entitled to a trial by jury unless she had in
some manner waived said right. (Sec. 592, Code Civ. Proc.)
‘We have held that having complied with the requirements
of section 631 by demanding a jury trial on January 4, 1932,
at the time the presiding judge set the case for trial for
January 28, 1932, appellant did not waive that right. And
in the absence of such waiver, she did not lose that right by
going to trial without a jury, but is entitled to a reversal
of the judgment. (Farrell v. City of Ontario, 39 Cal. App.
351 [178 Pac. 740]; Stern v. Hillman, supra; Hertter v.
Addis, supra.)

Upon the ground that the complaint failed to state a
eause of action, the appellants raised certain objections
which involved the validity of the sale of the property
which should be here disposed of to guide the trial court
in the event that a further trial may be had. Tltese cbjec-
tions, briefly stated, are as follows: (1) The note being

252

made payable to the Mutual Building and Loan Association
of San Jose and College Park, whereas the name of said
corporation had been changed to California Mutual Build-
ing and Loan Association, there was in existence at the
time of the execution of the note no corporation of that
name, and the note was therefore a nullity; the assignment
by the California Mutual Building and Loan Association
in its own name was void and plaintiff took no title to said
note; and the notice of default given by the plaintiff, who |
by reason of said void assignment held no title thereto,
was ineffective; (2) the application to sell said property
having been made to substituted trustees prior to the rec-
ordation of their substitution was ineffective; and (3) the
notice of breach and of the election to cause said property
to be sold to satisfy said obligations was fatally defective
in that it failed to allege that the breach of the obligation
was the failure to pay the entire sum due after an election
by the plaintiff to accelerate the maturity date of the note
for failure to pay one installment, but restricted said notice
of breach and default to failure to pay the installments and
interest due for the months of April, May and June, 1929.
The District Court of Appeal has held that these objections
are not tenable, and we adopt with some slight modification
that portion of the opinion of the District Court of Appeal
which deals with this phase of the case as correctly dis-
posing of these objections:

Hi “The note was made payable to the Mutual Building
and Loan Association of San Jose and College Park; and
it appeared that the name of this corporation had pre-
viously been changed to California Mutual Building and
Loan Association, but that it was designated therein by its
former name. This we think was sufficient as against either
a general or special demurrer, as a change in name does
not affect the identity of a corporation, although it may
have the effect of requiring additional averments in plead-
ing for the purpose of showing such identity. (14 Cor.
Jur., Corporations, sec. 886, pp. 321, 322.) Here the -aver-
ments were sufficient to identify the corporation.

“The complaint alleged that plaintiff recorded the
notice of default and it is contended that this was insuffi-
cient as there was nothing therein to show that plaintiff
acquired title to the note and deed from the Mutual Build-

SS 2:

ing and Loan Association of San Jose and College Park,
the allegation being that title was acquired from California
Mutual Building and Loan Association. As heretofore
“stated, the change of name by the payee corporation was
alleged, and the fact that the note was taken by its former
name was not material.

“There was a substitution of trustees under the
deed, and the complaint alleged an application to the new
trustees to sell the property after default. The point is
made that the application was made before the recordation
of the substitution of trustees, and that consequently the
application was invalid. It appears that an instrument was
duly executed substituting new trustees before the applica-
tion was made and that this instrument was subsequently
recorded. Under the trust deed the recordation of the
instrument was made conclusive proof of proper substitu-
tion, and its validity was not dependent thereon. Under
the deed its due execution was sufficient.

HI ‘‘The trust decd provided that if default should be
made in any payment on the note, whether of principal or
interest, the beneficiary might consider the note as imme-
diately due and payable, and record in the office of the
recorder of the county wherein the property is situated
‘a notice of such breach and of its election to cause said
property to be sold to satisfy said obligations’. The com-
plaint alleged that the plaintiff did elect to consider the
entire principal and interest of the note due and payable,
and recorded ‘a notice of default and election to cause said
property to be sold to satisfy said obligation’. Defendant
contends that in the absence of an allegation that a notice
of breach for nonpayment of the entire debt as accelerated
to maturity was recorded, the complaint failed to state a
eause of action. Section 2924 of the Civil Code provided
that when a power of sale was conferred upon a trustce
or any other person, to be exercised after the breach of
the obligation secured, there should be recorded a notice
of such breach and of his election to sell or cause to -be
sold such property to satisfy the obligation. The recorded
notice does not appear in the record, but the complaint
shows sufficiently a compliance with the provisions of the
deed and the code section,

2 en

HI ‘There was no allegation that plaintiff’s board of
directors exercised the option to declare the entire indebted-
ness due. Section 639 of the Civil Code provided that the
directors of a building and loan association might so elect
in case of default. Here it was alleged that plaintiff
elected to declare the entire indebtedness due. This was
sufficient as an allegation of ultimate fact.’’

HB Appellants also objected that the amended com-
plaint contained no allegation that the sale of the property
had been conducted as required by law (sec. 694, Code Civ.
Proe.), and by the provisions of the trust deed. Although
the allegation with respect to the sale of the property is
not as clear as might be desired, it is, in our opinion, sus-
ceptible of the construction that the sale had been properly
conducted. The special demurrer did not raise this point.
Upon the new trial of the case, the plaintiff may, if it is
so advised, amend this pleading to eliminate any uncer-
tainty as to its correct meaning.

As practically the same objections were set forth in and
formed the basis of defendants’ cross-complaint, it follows
that the trial court properly sustained a demurrer to said
pleading. The judgment rendered for the plaintiff on said
eross-complaint is therefore affirmed. For the failure of
the trial court to grant to defendants a jury trial, the
judgment, other than that part based upon said cross-
complaint, is hereby reversed. .

Langdon, J., Shenk, J., Waste, C. J., Seawell, J., and
Preston, J., concurred.

Rehearing denied,

[Sac. No. 4752, In Bank.—March 1, 1934.]

MERTON CRUM et al. Respondents, v. MT. SHASTA
POWER CORPORATION (a Corporation), Appel-
lant.

WILLIAM J. ALBAUGH, Respondent, v. MT: SHASTA

POWER CORPORATION (a Corporation), Appel-
lant.

William B. Bosley, Athearn, Chandler & Farmer, Frank
R. Devlin, Chenoweth & Leininger and Thomas J. Straub
for Appellant.

Garret W. McHnerney, as Amicus Curiae on Behalf of
Appellant.

Jesse W. Carter, Arthur C. Huston and Annette Abbott
Adams for Respondents.

THE COURT.—A rehearing was granted in this case to
give further consideration to two points discussed in our
former opinion. The first point has to do with the proper
interpretation of the case of Joerger v. Mt. Shasta Power
Corp., 214 Cal. 630 [7 Pac. (2d) 706], and the applica-
tion of the rule of that case to the facts of this case.
Upon further consideration we are of the opinion that
the discussion of the Joerger case was not necessary to the

2

opinion and may be stricken therefrom without in any
way affecting the result. The opinions of the District
Courts of Appeal in these cases have clearly established
the law of the case to be that the plaintiffs are entitled to
damages. To the discussion contained in our former
opinion on this point, we add the following observation.
HM Assuming, but not deciding, that defendant’s use
of the water is in the exercise of its riparian rights, but
constitutes an excessive use of the waters of Fall River,
plaintiffs could not, as contended by defendant, secure an
apportionment of said waters. This is so for the reason
that a public use has attached to the entire flow of Fall
River. If plaintiffs should bring an action for apportion-
ment they would be immediately met with the defense that
a public use had attached to the entire flow. The same
reasons that prevent the plaintiffs from securing an injunc-
tion in the present cases would prevent them from securing
an apportionment.

The second point requiring further discussion is whether
the stipulation offered by defendant should have been ad-
mitted into evidence. This point will be more fully dis-
eussed hereafter.

We are fully in accord with the other portions of our
former opinion. We therefore adopt as part of our opinion
on rehearing, the following portions of our former opinion
(86 Cal. Dec. 285 [24 Pac. (2d) 801]):

“These two cases are now before the appellate courts
for the second time. On the first appeals, the District
Court of Appeal reversed judgments in favor of the re-
spective plaintiffs. (Crum v. Mt. Shasta Power Corp.,
117 Cal. App. 586 [4 Pac. [2d] 564]; Albaugh v. Mt.
Shasta Power Corp., 117 Cal. App. 612 [4 Pac. [2d] 574].)
Petitions for hearing in this court were denied. After the
reversals, the two above cases were consolidated for trial,
and were retried before the court sitting with a jury. The
jury brought in a verdict in favor of Crum in the sum of
$32,100, and in favor of Albaugh in the sum of $96,300.
Defendant has separately appealed from each judgment.

“The controversy between these parties is of long stand-
ing, and grows out of the diversion by the defendant for
power purposes of substantially all of the waters of Fall
river above the confluence of that river with the Pit river.

|!

The Fall river empties into the Pit river in the northeastern
section of Shasta county. The two streams come together
at approximately right angles. The quantity of water
flowing in Fall river in the summer time is much larger
than the quantity flowing in the Pit river in those months.
Pit river is a flashy stream with a maximum flow of 10,000
second fect in the winter months, and a minimum flow at
Young’s Falls of as little as 3 second feet in the summer
months. The flow of Fall river, on the other hand, is
much more uniform. It has a maximum flow of about
1800 second feet, with a minimum of about 1000 second
feet.

‘Plaintiffs’ lands are located on opposite sides of the
Pit river on what is referred to as Pitville pool, about five
miles upstream from the confluence of the two rivers.
Crum owns about 116 acres and Albaugh owns about 400
acres, both areas being adjacent to the pool on opposite
sides thereof. .

“Tt is because of the physical characteristics of the
Pitville pool that this action has arisen. About 500 feet
downstream from the confluence of the two rivers, there is
a natural rock reef or barrier extending nearly across the
bed of the Pit river. This rock reef acted as a partial
natural dam and caused the waters of the two streams to
back up, creating Pitville pool. About 814 miles upstream
from the rock reef, on the Pit river, is to be found Young’s
Falls, located at the town of Pitville. The stream from
Young’s Falls down to the rock reef is known as the Pit-
ville pool. Plaintiffs’ civil engineer, Mr. Mau, testified as
to making a survey of the pool. He made a profile of the
pool, which was introduced into evidence as plaintiffs’ ex-
hibit 3, From this exhibit and from the testimony of Mau
interpreting it, it appcars that the maximum depth of this
pool opposite Albaugh’s lands is over 27 feet lower than
the top of the rock reef, and that the maximum depth of
the pool opposite Crum’s lands is over 19 feet lower than
the top of the rock reef. This profile map demonstrates
that the bed of the Pitville pool from the rock reef to
Young’s Falls is below the level of the top of the rock reef
and runs slightly downhill from the reef. Stated another
way, the bed of the pool from Young’s Falls to the rock
barrier runs slightly uphill and at no place appears to be

300 ee

within about 7 feet of the height of the rock reef. This
witness and others testified that the surface of the pool is
practically level. Several of plaintiffs’ witnesses testified
that there was no noticeable current and, in fact, no cur-
rent in the pool in the summer months; that, in the absence
of a wind, objects thrown into the pool would remain ap-
proximately stationary for many hours.

HM ‘This physical condition, according to plaintifis’
theory, makes their lands riparian to Fall river in ‘the
summer months, although their lands are located more than
five miles from where the Fall river empties into the Pit
river. We agree with plaintiffs that the evidence introduced
on this trial, as well as the law of the case, as established
on the prior appeals, fully establishes that Pitville pool is
a natural reservoir, which is filled with water in the summer
months from both the Pit and Fall rivers, and that in
those months plaintiffs’ lands are riparian to both streams.
We are of the opinion that the evidence establishes that
Fall river, in the summer months, in a state of nature,
contributed a large quantity of water to this pool, which
water mingled with and became an inseparable part of the
corpus of the water in the pool. In other words, Pitville
pool is a miniature lake in the summer months, its waters
in that period consisting of Pit and Fall river waters,
mingled indiscriminately. We cannot add to what the
District Court of Appeal said on this point on the prior
appeal in the Crum case. We adopt as a part of this
opinion the following portions of the Appellate Court’s
decision (117 Cal. App., at p. 596):

HM ‘‘‘It may seem like fiction to say that land which
is located on a pond formed by a dam in the bed of one
stream, may still be riparian to another stream which is
five miles distant from this land. While Fall river con-
tributes a substantial quantity of water which mingles with
and remains in Pitville pool, this pond may be deemed to
be an inlet or arm of Fall river, in spite of the fact that
there is no current in the pool by means of which the water
of the last-mentioned stream may be actually traced to the
locality of the land. It is not essential that there shall be
a current of the stream which actually washes the shores
of plaintiff’s land. It is sufficient if the waters of the re-
spective streams mingle in the same reservoir to form the

a

corpus of the same pool. The pond then becomes a basin
which is tributary to both streams. This situation may
then make plaintiff’s land riparian to both rivers. The case
of Turner vy. James Canal Co., 155 Cal. 82 [182 Am, St.
Rep. 59, 17 Ann. Cas. 823, 22 L. R. A. (N. 8.) 401, 99 Pac.
520, 522], is authority for this exact conclusion. It is
there said:

«ccMhe right of a riparian owner to the use of water
bordering upon his land does not, as plaintiffs contend,
arise from the fact that the water is flowing and that any
part thereof taken from the stream is immediately replaced
by water from the current above it. It comes from the
situation of the land with respect to the water, the oppor-
tunity afforded thereby to divert and use the water upon
the land, the natural advantages and benefits resulting from
the relative positions, and the presumption that the owner
of the land acquired it with a view to the use and enjoy-
ment of these opportunities, advantages, and benefits.
(Duckworth v. Watsonville etc. Co., 150 Cal. 526 [89 Pac.
338].) Out of regard to the equal rights of others whose
lands may abut upon the same water, the law has declared,
as will hereafter be more fully shown, that the use of the
water for irrigation, so far as it affects the right of others
similarly situated, must be reasonable, and must be con-
fined to a reasonable share thereof. But with this common
limitation, the right to use water upon adjoining land
applies as well to the water of a lake, pond, slough, or any
natural body of water, by whatever name it may be called,
as to a running stream... We have never heard that
riparian rights depended upon the character of the current
in the water upon which these rights extend. They exist
if the water be an artificial pond made by a dam in a water
course, as well as when it is an unobstructed running
stream.”?

“© *So long as the bulk of water from Fall river remains
impounded in Pitville pool, we may assume, upon the
reasoning of the last-mentioned case, that plaintiff’s land
is riparian to Fall river.

“**Tt must be conceded, however, that the same
situation does not prevail in times of flood water during
which these two rivers rush down over the dam with

“mighty velocity at a depth of many feet. It is apparent

ee

that under such conditions very little of the water of Fall
river remains impounded in the pool. During the season
when the flood water and eurrent of Pit river carry Fall
river water down over the dam, the plaintiff’s land is not
riparian to Fall river. It follows that while the plaintiff’s
land may be riparian to Fall river during times of low
water in the summer, it is not riparian to that stream
during the season of flood water in the winter months.

“‘*The appellant suggests upon rehearing that this court
has misconstrued the application of the case of Turner v.
James Canal Co., 155 Cal. 82 [182 Am. St. Rep. 59, 17 Ann.
Cas, 823, 22 L. R. A. (N. 8.) 401, 99 Pac. 520, 524], by
holding that because the Pit and Fall rivers both con-
tribute to the supply of water in the Pitville pool the land
of plaintiff would become riparian to Fall river during the
season when its water became an inseparable part of the
corpus of that pond. It is pointed out that the Supreme
Court held that the Fresno slough was an arm or inlet of
the San Joaquin river only when the water from Kings
river was not flowing into the slough; that the court did
not hold that the land which was situated on the slough
was riparian to both rivers at the same time. It is there-
fore argued that this court erred in holding that the plain-
tiff’s land was riparian to both Fall and Pit rivers at the
same time. We have re-examined that case with great
eare and have concluded there is nothing therein con-
tained which is in conflict with what was said in our
former opinion and which is herein adopted as the law of
this case respecting that subject.’ (Italies ours.)

“Under the above reasoning, which has become the law
of the case, we take it to be settled that plaintiffs’ lands,
in the summer months, are riparian to both Pit and Fall
rivers.

“The defendant is a hydroelectric power company. It
owns all the land on both sides of and riparian to Fall
river, from where it empties into the Pit river, to a point
about two miles upstream. It also owns all the land on
both sides of Pit river and riparian thereto from a point
about 600 feet above the juncture of that stream with the
Fall river, down the Pit river for about seven miles. At
this lower point on Pit river is located defendant’s power
plant. In 1920, defendant started construction of a dam,

SC

penstock and tunnel on the Fall river about one mile above
its juncture with the Pit, for the purpose of diverting for
power purposes substantially the entire flow of Fall river
to the power plant on Pit river. By means of these di-
version works, the entire flow of Fail river, with the ex-
ception of a small quantity allowed to remain for the use
of certain lower claimants other than the plaintiffs, was
diverted from a point above the confiuence of the two
streams to a point about seven miles below. Thus the
waters of Fall river were wholly and entirely diverted away
from Pitville pool.

“The diversion works and power plant were completed
on September 30, 1922. The entire flow of Fall river was
diverted on that day for a trial run. Immediately the
level of the water in Pitville pool was lowered about five
feet. The next day the water of Fall river was turned back
by defendant into its natural channel, and the pool imme-
diately was filled to its normal depth. To give an idea of
the relative amounts of water contributed by each stream
to the waters of the pool, plaintiffs’ engineer Mau testified
that in the summer months, if the pool were empty, it
would take about 100 days for the flow of Pit river to fill
the pool, while the normal flow of Fall river would fill the
pool in one day.

“As already mentioned, a short distance downstream
from the confluence of the two rivers is located a natural
rock reef, which serves as a natural dam and holds a por-
tion of the waters of the two rivers in Pitville pool. This
rock reef is on land owned by defendant. On the western
end of this rock barrier was a large crevice some 8 feet in
depth, which permitted a considerable quantity of water
from the pool to escape down the Pit river. Some time
between September, 1922, and January, 1923, the defendant
constructed a conercte dam across the crevice in the natural
rock dam, thus connecting the rock barrier with the western
shore of Pit river. In January of 1923 defendant again
diverted all of the waters of Fall river away from Pitville
pool. The natural dam, as supplemented by the artificial
dam, served to impound effectually the waters of Pit river,
so that the level of Pitville pool was maintained at the same
height as before the diversion. Sufficient water has always
come down Pit river and its tributaries to keep the pool

20

full, and to keep the water running over the dam. It is a
conceded fact that from the date of the diversion to the
date of the last trial in 1932, the level of Pitville pool has
thus been maintained as it was before the diversion. In
other words, plaintiffs at all times since the diversion have
had access to the same quantity of water as existed before
the diversion.

‘*Plaintiffs commenced the present action in 1923, two
causes of action being alleged. Plaintiffs alleged their
ownership of lands on Pitville pool; that said lands were
riparian to Fall river; that defendant had wrongfully di-
verted the entire flow of Fall river; that by reason thereof
plaintifis have been deprived of their riparian rights in
and to the waters of Fall river. The first count of the com-
plaint prayed for an injunction, the second count for dam-
ages. Defendant answered denying that plaintiffs’ lands
were riparian to Fall river. This issue has been determined
adversely to defendant. Defendant also alleged that it was
diverting the water in the exercise of its riparian right;
that it had constructed the dam at the rock reef; and that
since its construction the level of the water had been main-
tained. As a separate defense, defendant set forth that it
was using the waters of Fall river for the development of
electric energy for the purpose of sale to the public; that
plaintiffs knew of the construction of the power plant and
permitted its construction without objection; that plaintiffs
are estopped from preventing the diversion by reason of the
fact that a public use had attached to the waters diverted.
On the issues thus formed, the cases went to trial, resulting,
as already stated, in judgments in favor of plaintiffs. While
the appeals were still pending in the District Court, plain-
tiffs abandoned their claim for an injunction. The Appel-
late Court reversed the judgments and sent the cases back
for retrial. On the retrial the pleadings were not amended,
except as to the prayer of the answer. The original prayer
was stricken and, in lieu thereof, there was inserted a prayer
asking for (1) a determination of the respective rights of
the parties in and to the water, and (2) a determination that
defendant’s diversion and use of the waters was not in the
exercise of its riparian rights.

“One other occurrence preceding the present trials must
be referred to. After the first appeals had become final

2S

and the remittitur filed in the lower court, it was discovered
that defendant as the successful party on appeal had been
awarded its costs. Plaintiffs thereupon moved in the Ap-
pellate Court to recall and modify the remittitur to allow
plaintiffs their costs, on the theory that the suits were in-
verse condemnation suits and that, therefore, the condemnees
were entitled to costs. The Appellate Court held the actions
were not actions in eminent domain and that, therefore,
plaintiffs were not entitled to costs. (Crum v. Mt. Shasta
Power Corp., 124 Cal. App. 90 [12 Pac. [2d] 134]; Albaugh
vy. Mt. Shasta.Power Corp., 124 Cal. App. 779 [12 Pae. [2d]
137].) These last decisions were not rendered until the day
after the jury brought in its verdict on the retrial of these
cases, so that the trial court did not have the benefit thereof
on the retrial.

“One of the most perplexing problems presented on the
present appeal is to determine just what the Appellate
Court decided on the prior appeals, and to determine just
what was there determined to be the law of the cases.
From the quotation above, it appears that the Appellate
Court clearly held that plaintiffs’ lands were riparian to
Fall river in the summer time. It was also held that de-
fendant’s use of the water of Fall river would not ripen
into a right by adverse possession, evidently because defend-
ant disclaimed any intent to appropriate the water and
claimed to be diverting it in the exercise of its riparian
right. The effect of the public use having attached to the
water diverted was not discussed. The Appellate Court
also pointed out that the action was not one for an appor-
tionment of the waters between riparian owners, but an
action by one riparian owner against the other for injury
to the former’s usufructuary title to the waters of Fall
river. After pointing out that a riparian owner has the
right to have the water flow past his land in its usual course,
the court stated (117 Cal. App. 603):

“« «Tt follows that a diversion of that river [Fall river]
destroys the natural condition which makes the land border-
ing on Pitville pool riparian to that stream. If the contri-
bution of Fall river water to Pitville pool is beneficial to the
land of plaintiff, then he is afforded a remedy for its
withdrawal, by means of a suit for damages or for injunc-
tive relief. He has seen fit to rely upon a suit for dam-

P|

06

ages.... Assuming the evidence does adequately show
that the water which is normally contributed to Pitville pool
is beneficial to the land of plaintiff which is located thereon,
the plaintiff would be entitled under the pleadings in this
ease to whatever damages he has suffered from the diversion
of the stream.’

“Tt is true that the Appellate Court also stated
(117 Cal. App., at p. 599):

‘*«The appellant, however, specifically disclaims title to
this diverted water by adverse possession. It asserts the
right to divert and use this water as a riparian owner
thereof for the beneficial purpose of manufacturing hydro-
electric power only to the extent that other riparian owners
are not in need of the water. It has been specifically de-
termined by the Supreme Court in the case of Fall River
Valley Irrigation Dist. v. Mt. Shasta Power Corp., 202 Cal.
56 [56 A. L. R. 264, 269, 259 Pac. 444], that the appellant’s
use of the water of Fall river was for proper riparian
and beneficial purposes.’

“‘Appellant strenuously contends that this language neces-
sarily means that defendant’s entire diversion of the waters
of Fall river away from Pitville pool is a proper riparian
use and that plaintiffs’ remedy, if any, is an action to ap-
portion. In view of the direct and unequivocal holding of
the Appellate Court that plaintiffs herein are entitled to
damages caused by the diversion, we cannot interpret the
last-quoted statement to mean that defendant’s diversion of
the entire stream constitutes a proper reasonable riparian
use, and that, therefore, plaintiffs are precluded from re-
covering any damages caused by the diversion. Not only
would such an interpretation be contrary to and inconsis-
tent with the holding that plaintiffs are entitled to dam-
ages, but, if the Appellate Court had so intended, it would
have directed judgment to be entered for defendant, there
being no further issues to be determined. But this it did
not do. A fair reading of the entire opinion clearly indi-
cates that the Appellate Court reversed the trial court on
the issue of damages alone, and intended a retrial on that
issue. As we interpret the last-quoted statement, all that
was intended thereby was that the use of water for power
purposes under a proper state of facts is a proper riparian
use. With that doctrine, we have no quarrel. Hi The

Ss

courts of this state have long recognized that a riparian
owner in the proper exercise of his riparian right may use
the water as a motive power to propel machinery subject
only to the domestic uses of lower riparians. However, this.
does not mean that the use of such waters for power pur-
poses gives any riparian owner any greater right than any
other riparian use would give him. The language above
referred to does not mean that one riparian in the exercise
of his riparian right can divert the water entirely around
an opposite riparian owner, when and if such diversion re-
sults in substantial damage to the opposite owner. We are
clearly of the opinion that under the issues presented in
this case, and under the law of this case as enunciated by
the Appellate Court, plaintiffs are entitled to damages, if
any substantial damage or diminution in the value of their
lands has resulted from the diversion, to which a public use
has attached. .

Hl ‘Under the theory enunciated by this court in the
recent case of Gin S. Chow v. City of Santa Barbara, 217
Cal. 673 [22 Pac. (2d) 5], in interpreting article XIV,
section 8, of the state Constitution, a riparian is not entitled
to damages, even as against an appropriator, simply because
his usufructuary title to the water has been interfered with.
It is incumbent upon him to show substantial actual or
prospective damage therefrom.

“We now turn to a discussion of the question as to whether
the evidence here shows any substantial damage to or
diminution in the value of plaintiffs’ lands, caused by the
diversion and the construction of the dam. Under the facts
of this case, such damages could have arisen in one of two
ways. First, the diversion might have diminished the quan-
tity of water in Pitville pool to a level where plaintiffs’
actual or prospective needs were interfered with; or,
secondly, the diversion and construction of the dam might
have affected the quality of the water in Pitville pool to
such an extent that the value of plaintifis’ lands was ad-
versely affected to a material degree.

“We turn first to a discussion of the effect of the di-
version on the quantity of water in the pool. The evidence
shows that when the waters of Fall river were first diverted
on September 30, 1922, the level of Pitville pool was lowered

208

from four to five fect. However, the level was restored by
the construction of the dam at the rock reef below plain-
tiffs’ lands. There is no dispute but that since the con-
struction of the dam there has been exactly the same quan-
tity of water in the pool as was there before the diversion.
It must be remembered that under the facts and law of this
case Pitville pool is in legal effect a lake or reservoir with
two sources of supply—Pit river above the pool, and Fall
river. The pool has one outlet—Pit river below the pool.
One source of supply has been taken away by the diversion
and by the publie use attaching thereto. But, due to the
construction of the dam, the level of the pool has been main-
tained exactly as it was before the diversion. The only
difference is that now the pool is filled solely with Pit
river water instead of a mixture of Pit and Fall river waters,
This water, which is supplied in lieu of Fall river water,
is not foreign water, but water from one of the natural
sources of Pitville pool, namely the Pit river.

“During the course of the trial, defendant offered to
stipulate as follows:

““«Mt. Shasta Power Corporation, defendant herein, in
view of the decision of the District Court of Appeal in the
above entitled cause, hereby admits that said plaintiff, by
virtue of his ownership of the lands described in his com-
plaint and riparian to that part of Pit river known and
designated as the Pitville pool, is entitled to the maintenance
of the water in that pool, at all times, substantially at its
natural level as such level would be if the waters of Fall
river should continually flow into it at the natural con-
fluence of said rivers.

“**This defendant asserts that, by virtue of its ownership
of the riparian rights and the riparian lands described in
its answer, it has the right to continue to divert and use
at all times the waters of Fall river as it is now doing for
the operation of its Pit No. 1 Power Plant, provided only
that its diversion and use of such water shall not actually
result in substantially lowering the level of the water in
said Pitville pool below its aforesaid natural level.

“‘eThis defendant declares that it does not now intend
and never has intended or purposed to infringe or violate
the right of said plaintiff to the maintenance of the afore-
said natural level of the water in said pool; and does hereby

ee ee

undertake and promise to maintain and operate the dam
which it has heretofore constructed at the rock reef in the
channel of said Pit river, a short distance below the natural
confluence therewith of Fall river, and to maintain the level
of the water in said Pitville pool substantially at its afore-
said natural level and not lower than the top of the afore-
said dam by means of its maintenance and operation of
said dam and by discharging or causing to be discharged
into said Pitville pool so much of the water naturally flowing
in said Fall river and its tributary, Tule river, as may be
required for that purpose from time to time, so long as this
defendant shall continue to divert water from Fall river
above its natural confluence with Pit river; and does hereby
irrevocably consent that the judgment to be entered herein
shall require this defendant to maintain and operate said
dam and to maintain the natural level of the water in said
Pitville pool as it has herein undertaken and promised to do.

“«*In witness whereof said Mt. Shasta Power Corporation
has caused its corporate seal to be hereunto affixed and has
caused its corporate name to be hereunto subscribed by its
officers thereunto duly authorized on this 27th day of May,
1932.’

“During the course of the argument over this stipulation,
counsel for defendant further agreed that if the waters of
Pitville pool ever became insufficient to maintain the level
of the pool, defendant would agree that Fall river water
should be released sufficient to keep the level of the pool
at the height existing before the diversion. The trial court
refused to admit this stipulation into evidence, or to in-
struct the jury in reference thereto. The trial court’s
refusal was based on the theory that the stipulation was
ineffectual for any purpose unless the plaintiffs agreed
thereto.”

It is to be noted that this stipulation contains two very
important concessions on the part of the defendant. First,
it is agreed, that defendant will maintain the level of the
pool by a release of Fall river waters if necessary; and
second, it is agreed that the defendant will always main-
tain the dam and that the judgment may contain a pro-
vision to that effect.

Hl As to the first concession, it is our opinion that it
was beyond the power of the defendant to make without

10

first securing the consent of the railroad commission. The
evidence clearly shows that defendant is a publie utility
and that a public use has attached to all but an immaterial
portion of the flow of Fall River. For the ten-year period
immediately preceding the trial of this action substantially
the entire flow of Fall River has been diverted by defendant
and devoted to a public use. In effect the stipulation
amounts to an offer to reconvey a portion of this water to
plaintiffs. This, defendant cannot do without the consent
of the railroad commission. A public utility cannot thus
convey its property which has been dedicated to a public
use without the consent of that commission. Section 51 of
the Public Utilities Act (Stats. 1927, p. 78) expressly pro-
vides :

“No publie utility shall henceforth sell, lease, assign,
mortgage, or otherwise dispose of or encumber the whole or
any part of its railroad, street railroad, line, plant, system,
or other property necessary or useful in the performance of
its duties to the public ... without first having secured
from the railroad commission an order authorizing it so to
do. Every such sale, lease, assignment, mortgage, disposi-
tion, encumbrance, merger or consolidation made other than
in accordance with the order of the commission authorizing
the same shall be void... . ’”

There are many cases holding, in accordance with that
section, that a public utility cannot convey or transfer its
property which has been dedicated to a public use without
the consent of the railroad commission. (Napa Valley Elec.
Co. v. Calistoga Elec. Co., 88 Cal. App. 477 [176 Pac. 699];
Water Users etc, Assn. v. Railroad Com., 188 Cal. 487 [205
Pae. 682] ; Baldwin v. Railroad Com., 206 Cal. 581 [275 Pac.
425].) .

Appellant relies on Collier v. Merced Irr. Dist., 218 Cal.
554 [2 Pac. (2d) 790], and Colorado Power Co. v. Pacific
Gas & Elec. Co., 218 Cal. 559 [24 Pac. (2d) 495], as estab-
lishing a contrary doctrine. It is true that those cases
recognized that in water cases a defendant may minimize
the damages by guaranteeing a water supply to the plain-
tiff, but that is as far as the rule established by those cases
goes. The Collier case did not involve a public utility so
that the consent of the railroad commission was not required.
In the Colorado Power Company case, although the defendant

Ss

was a public utility, it does not appear that the point here
involved was discussed or mentioned. That case cannot, for
that reason, be considered as authority on the point. We
emphasize the fact that the stipulation here involved was
offered after the public use had attached. We, therefore,
hold that the trial court properly excluded this part of the
stipulation from consideration.

Hl However, this reasoning does not apply to the second
concession contained in the stipulation, that is, the guarantee
to maintain the dam. Such a guarantee was well within the
powers of the company to make and in our opinion should
have been admitted by the trial court. The gravity of this
error in refusing to permit the jury to consider this guar-
antee becomes apparent when the peculiar facts of this case
are considered. The evidence shows that since the construc-
tion of the dam the flow of Pit River at all times has been
more than sufficient to keep Pitville Pool at the level that
existed before the diversion. A period of about ten years
has elapsed since the construction of the dam, and during
all that period the pool has been maintained at its old level.
Plaintiff as far as quantity of water is concerned has failed
to show any damage actual or prospective by reason of the
diversion, provided the dam is maintained. This the de-
fendant offered to do and offered that the judgment should
so provide. It was error of a most serious nature to ex-
elude from the jury’s consideration this portion of the
stipulation.

The seriousness of the error is made evident when the
form of the hypothetical question submitted to plaintiffs’
value witnesses is considered. By that question the wit-
nesses were told that after the diversion ‘‘the defendant
constructed a concrete dam and works at the point mown
as the rock reef and that thereafter the Pit river pool was
restored to its former level and that said level has since been
maintained’’, The witnesses were not told that defendant
had agreed to stipulate that it would continue to maintain
the dam. The hypothetical question also told the witnesses
that after the diversion and before the construction of the
dam the level of Pitville pool had been lowered four to five
feet. Without a guarantee of the future maintenance of
the dam it is obvious that the value witnesses were forced
to consider that plaintiffs’ rights as to quantity of water

a1 Ce)

were uncertain, The cross-examination of these value wit-
nesses indicates that such was the fact. This was error and
requires a reversal on the issue of damages alone.

On the other issues involved in this case the following
portions of our former opinion are pertinent and are hereby
adopted as a portion of the opinion of this court on rehear-
ing (86 Cal. Dec. 248, 249 [24 Pac. (2d) 801]):

HE ‘However, although it is true that under the facts
of this case plaintiffs have not or will not be damaged as to
the quantity of water in the pool, it does not necessarily
follow that they have not been damaged in other respects.
Under the California authorities, and under the law of
these cases as enunciated on the former appeals, a riparian
owner, even as against another riparian, is entitled not only
to an undiminished flow of water, except as reduced by the
reasonable use of other riparians and prior appropriators,
but also to a substantially unpolluted stream. The riparian
owner is entitled not only to the same quantity of water,
but also to the same quality of water, provided by nature
in the stream. (Crum v. Mt. Shasta Power Corp., 117 Cal.
App., at p. 606 [4 Pac. (2d) 564].) We are of the opinion
that the evidence in the present case offered on behalf of
plaintiffs clearly shows that the quality of the watér in
Pitville pool has been materially impaired by the diversion
and by the construction of the dam. The evidence shows,
without conflict, that the waters of Fall River have always
been clear and pure, while the waters of Pit River have
always been dark and murky. The evidence likewise shows
that before the diversion the waters of Fall River rushed
down into Pitville pool with a minimum flow of 1,000
second-feet. The Fall River waters, as we have already

. held, mingled with the dark murky waters of Pit River to
form the pool. The jury could have reasonably inferred
that the Fall River waters freshened the water in the pool.
Since the diversion, the freshening effect of the Fall River
waters has been lost. Moreover, by the construction of the
dam, obviously the flow of water through the crevice in the
rock reef has been stopped, resulting in the Pit river water
backing up. There was ample evidence introduced on behalf
of plaintiffs to show that since the diversion the waters of
Pitville pool have become stagnant; that the pool in the
summer months is now covered with weeds, slime and moss;

|:

and that.a very undesirable odor now emanates from the
pool, which is obnoxious to the senses for a distance of one-
half mile from the water. There is also some evidence that
since the diversion cattle will not drink the polluted water.
There is ample evidence from which the jury could have
found that these conditions did not exist before the diver-
sion, and from which the jury could have inferred that
the changed conditions were caused by the diversion and by
the construction of the dam. It hardly necd be added that
if such changed conditions resulted in a material impair-
ment of the value of plaintiffs’ lands, plaintiffs may recover
therefor.

HM ‘Appellant contends that the question of pollution
cannot be considered for the reason that the former appeals
established as the law of the case that there was no pollu-
tion. We do not so interpret the Appellate Court opinion.
All that the Appellate Court directly held was that there
was no finding that the changed conditions were the result
of the diversion. It is true that by way of dicta the court
held that even if a certain finding could be so construed,
‘there is no substantial evidence to support a judgment of
damages based upon the pollution of the Pitville pool caused
by the diversion of Fall river’. It is obvious that the above
statement -had reference to the facts as shown on the prior
trial. On this trial the evidence was not the same as on
the prior trials. On the present trial, additional witnesses
on the question of pollution were called, and their testimony,
and the testimony of the witnesses called on both trials,
was substantially stronger than was produced. on. the former
trials. It is obvious, therefore, that the rule of the law of
the case has no application.”’

However, from what has been said, we do not intend to
foreclose the plaintiffs on a retrial from making a further
showing, if they can do so, that the offer of the defendant
to maintain the dam at the rock reef and the maintenance
thereof as promised will not effectually maintain the natural
level of the water in the Pitville pool without discharging
therein a portion of the water of Fall River. It is obvious
that no useful purpose would be served in retrying all the
issues in this case. The only issue requiring a further trial
is the issue of damages.

es

For the foregoing reasons the judgments appealed from
are and each of them is hereby reversed and the cases re-
manded for a new trial on the issue of damages alone and
in accordance with the views herein expressed. Both sides
to bear their own costs on this appeal.

Preston, J., and Langdon, J., deeming themselves dis-
qualified, did not participate herein.

Rehearing denied.
Preston, J., and Langdon, J., deeming themselves dis-
qualified, did not participate therein.

[S. F. No, 14969. In Bank—March 1, 1934]

JACK REUTER, Petitioner, v. BOARD OF SUPER-
VISORS OF THE COUNTY OF SAN MATEO et al.,
Respondents.

316

Raymond J. O’Connor and W. H. Morrissey for Peti-
tioner.

Edmund Scott and Richard O. Bell for Respondents.

Arthur H, Redington, Everett W. Mattoon, County
Counsel (Los Angeles), J. H. O’Connor, Assistant County
Counsel, Earl Warren, District Attorney (Alameda), Ralph
E. Hoyt, Chief Assistant District Attorney, and Robert H.
McCreary, as Amici Curiae on Behalf of Respondents.

CURTIS, J—The county of San Mateo, acting under the
authority of section 744 of article XI of the Constitution
of this state, framed a charter for its own government,
which was approved by the legislature at its session in
1938. By this charter the office of county engineer was
ereated: The offices of county surveyor and county engineer
were consolidated, and the duties of the consolidated offices
were directed to be performed by the incumbent county
surveyor, with the proviso ‘‘that upon the termination of the
present term of office of the surveyor, such office shall, ipso
facto, become and be abolished, and the duties required by
law to be performed by the surveyor shall thenceforth be
performed by the engineer’, (Sec. 5 of art. VI of said
charter.)

Sections 1 and 2 of article I of said charter provide as
follows:

“See. 1. Consolidation of Existing Road Districts. All
existing road districts in the county are hereby consolidated
into a single road district which shall comprise all of the
territory lying within the county.

Ss

“See, 2. County engineer to be ex-officio road commis-
sioner. The county engineer shall be, ex-officio, road com-
missioner of the existing road districts of the county, and
of the consolidated road district in section 1 of this Article
provided.’”

The remaining sections of article IX outline specifically
the duties of the county engineer, among which are those set
forth in section 3 of said article IX as follows: ‘‘The county
engineer as ex-officio road commissioner shall have and exer-
cise the powers and perform the duties vested in road com-
missioners in pursuance of the general law, and such other
powers and duties as may be vested in him in pursuance
of the provisions of this charter.”

After the approval of this charter by the legislature and
on July 31, 1933, the board of supervisors of said county,
for the purpose of carrying into effect the provisions of
article IX of said charter, passed an ordinance, as required
by section 6 of said article, whereby the members of said
board of supervisors relinquished as road commissioners
their duties over the roads of said county. Thereafter the
petitioner herein, a citizen, resident and taxpayer of said
county, made written demand upon the board of supervisors
that it resume its duties over the roads and highways of the
county, as said duties are defined and directed to be per-
formed by the general laws of the state. Upon the refusal
of the board of supervisors to comply with this demand to
resume jurisdiction over said roads and highways, petitioner
instituted this proceeding before this court, in which he
seeks to compel the board of supervisors, by writ of mandate,
to assume jurisdiction and resume its duties over the roads
and highways of the county. An alternative writ was is-
sued to which the respondents have made their return, both
by general demurrer and answer to the petition. The an-
swer raises no issue of fact, so the questions presented are
solely questions of law.

The power of the board of supervisors to relinquish juris-
diction over the public roads and highways of San Mateo
County and the validity of its action in surrendering said
jurisdiction to the county engineer are governed and must
be determined by the section of the Constitution authorizing
counties to frame and adopt charters for the government of
their local affairs, and the charter of said county as framed

a8 Ce)

and adopted under said section of the Constitution.
HI Before discussing this question, however, we will con-
sider a preliminary question raised by petitioner with rela-
tion to the right of the county surveyor of said county to
discharge the duties of county engineer and to act as said
county engineer. While the petitioner has alleged in an
amendment to his petition that James 8. James was not the
county engineer of said county, he admits in his pleadings
that James was, at the date of the adoption of said ordi-
nance, the county surveyor of said county. We have al-
ready referred to provisions of the charter which created the
office of county engineer and which provide that the offices
of the county surveyor and county engineer shall be con-
solidated, and which provisions of the charter further pro-
vide that the duties of the consolidated offices should be
performed by the incumbent county surveyor during his
present term of office. In the light of these provisions of
the charter we do not think there is any basis for the claim
that James, who holds the office of county surveyor of the
county is not also the county engineer of said county, as
that office is provided for and created by the charter.

HI A further objection is made as to the manner in
which James was selected to fill the position of county en-
gineer.

There is.a general provision of the charter to the effect
that the appointment of certain officers of the county, in-
cluding the county engineer, shall be made by the county
executive, subject to confirmation by the board of super-
visors. Petitioner contends that this provision of the char-
ter was not complied with in the appointment of James
as county surveyor. It is quite apparent that this general
provision of the charter has no application to James’ occu-
pancy of the office of county engineer, under the express
terms of the charter consolidating that office and the office
of county surveyor then held by James. He holds the office
of county engineer not by virtue of any appointment, but
under the provisions of the charter consolidating the two
offices and directing him to perform the duties of county
engineer during the remainder of his term of office as
county surveyor.

TM Petitioner bases his claim that the board of super-
visors has exclusive jurisdiction over the roads and high-

a

ways of the county upon the contention that such jurisdic-
tion is conferred upon the board by the general laws of the
state, and that it has not been legally divested of that
jurisdiction by the charter of said county. Respondents,
upon the other hand, rely upon the provisions of the charter
above referred to, and contend that by these sections of the
charter the powers of road commissioners heretofore en-
joined upon and performed by the several members of the
board of supervisors have been taken from them and con-
ferred upon the county engineer of the county. It is clear
from the sections of the charter referred to above that at
least an attempt was made by the framers of the charter,
and by the people in their adoption thereof, to transfer the
duties of road commissioners from the members of the
board of supervisors to the county engineer, but petitioner
eontends that these provisions of the charter are rendered
nugatory by the Constitution itself, which provides in sub-
division 4 of section 744 ‘“‘that the provisions of such
charters relating to the powers and duties of boards of
supervisors and all county officers shall be subject to and
controlled by general laws.’’? (Subd. 4, sec. 7%, art. XI,
Const.)

In support of his contention petitioner calls attention to
the general laws of this state prescribing the duties of the
boards of supervisors over the roads and highways as the
same are contained in sections 2641, 2645 and 4041.7 of the
Political Code. By these sections of the code each county
of the state is divided into road districts, each supervisor
is made ea-officio road commissioner of his district, and as

_ ex-officio road commissioner, under the direction and super-
vision and pursuant to the orders of the board of super-
visors, he is to take charge of the highways in his district,
and shall employ all men, teams, watering cars and all help
necessary to do the work in his district when the same is
not let by contract.

The general laws making it the duty of members of boards
of supervisors to act as road commissioners in their re-
spective counties, as defined in the sections of the Political
Code referred to above, appear to be in’ direct conflict with
the provisions of the charter of San Mateo County provid-
ing for the appointment of a county engineer, who shall be
ex-officio road commissioner of the whole county, with all

820 ee

the powers and duties attached to said office of road com-
missioner, as well as further powers and duties over the
roads and highways of the county conferred upon him by
various provisions of the charter. Petitioner contends that
by reason of this conflict between the gencral laws and the
charter provisions the latter must give way under the pro-
viso in subdivision 4 of section 744 of article XI of the Con-
stitution ‘‘that the provisions of such charters relating to
the powers and duties of boards of supervisors and all other
county officers shall be subject to and controlled by general
laws.””

The above proviso, relied upon by petitioner, occurs or is
found in that part of section 744 of article XI of the Con-
stitution reading as follows: ‘‘It shall be competent, in all
charters, framed under the authority given by this section,
to provide, in addition to any other provisions allowable by
this constitution, and the same shall provide for the follow-
ing matters:

“4. For the powers and duties of boards of supervisors
and_all other county officers, for their removal and for the
consolidation and segregation of county offices, and for the
manner of filling all vacancies occurring therein; provided
that the provisions of such charters relating to the powers
and duties of boards of supervisors and all other county
officers shall be subject to and controlled by general laws.’’

From a mere reading of this provision of the constitu-
tional section it is apparent that the proviso contained
therein is inconsistent with and repugnant to the general
provision of that portion of the section of which it is a part.
The general provision of the section provides that it shall
be competent in all charters framed under said section of
the Constitution, and ‘‘the same shall provide’’ for the
powers and duties of boards of supervisors and of all
county officers. At the time of the adoption of said consti-
tutional amendment the general laws of the state, with
meticulous care, had fixed and defined the powers and
duties of the board of supervisors and of each and every
county officer in the state, except those acting under a city
and county government, with which we are not here con-
cerned. Therefore, if the powers and duties of boards of
supervisors and county officers, as fixed by the charter, are
“subject to and controlled by general laws’’, then any at-

es

tempt to provide for such powers and duties in the charter
would be an idle act and a useless expenditure of effort. If
these powers and duties as fixed by the charter conflicted in
any way with those fixed by general laws then, if the proviso
is to control, to the extent that they are inconsistent with
those fixed by the general laws, they would be ineffective
and void. If they did not so conflict with those fixed by
the general laws, as we have said before, the charter pro-
visions fixing said powers and duties, though valid, would
simply amount to a re-enactment of that which was already
the law—a mere superfluous or idle act. We do not think
the framers of the amendment, nor the pcople of the state
who ratified it, contemplated any such absurd result.
[| It is a cardinal rule in the interpretation of statutes
and also of constitutional enactments that a construction
should not be given to the statute or to the Constitution, if it
can be avoided, which would lead to absurd results. (Bak-
kenson v. Superior Court, 197 Cal. 504, 511 [241 Pae.
874].)

“A construction should not be given to a statute, if it
can be avoided, which would lead to absurd results or to a
conclusion plainly not contemplated by the legislature.’’
(Merced Security Sav. Bank v. Casaccia, 103 Cal. 641, 645
[87 Pac. 648, 649].) ‘‘In other words, where the meaning
is doubtful, any construction which would lead to absurd
results should be rejected, provided, of course, nothing
stands in the way of a different and more rational con-
struction, since absurd results are not supposed to have been
contemplated by the legislature.’’ (23 Cal. Jur. 766.)

HI Another rule of construction which we think can
well be applied to the interpretation to be given to said
constitutional provisions, is that regarding the extent and
scope of a proviso. In California, Jurisprudence, volume
283, page 744, it is said: ‘‘A proviso—the office of which
is to explain, qualify or restrain the operation of a preced-
ing provision—should be read in the light of the subject
matter of the act, as well as in connection with the clause
which it follows. As a general rule, a proviso which is
clearly repugnant to the body of the act will be ignored,
though, in accordance with the settled rule, it is the duty
of the court to reconcile a proviso, when reconciliation is
practicable, with an apparently conflicting provision so as

a

2 es

to carry into effect the intention of the lawmakers as it
appears from the whole act and from contemporaneous legis-
lation.”” ‘It would seem that the language there used
could be construed as operative without nullifying these
express provisions; but if this be not so, and the two provi-
sions are contradictory, it is the proviso and not the prin-
cipal part of the statute which must give way.” (City of
Seattle v. Rothweiler, 101 Wash. 680 [172 Pac. 825], and
eases cited.) ‘‘Where the proviso is repugnant to the body
or purview of the statute and cannot be reconciled there-
with it is inoperative and void.’? (59 Cor. Jur., p. 1091.)
“‘Where a proviso is repugnant or inconsistent with the
purview of the act it is common learning that the latter
must prevail.’ (Gist v. Rackliffe-Gibson Const. Co., 224
Mo. 369 [123 8. W. 921, 927].) Applying the rule an-
nounced in these authorities we have no hesitancy in hold-
ing that the proviso as it appears in the provision of the
constitutional amendment above quoted, and which is re-
pugnant to the provision itself, is, to that extent void and
should be ignored in construing said provision.

HE Another well-established rule of construction is that
of contemporary construction. Following the adoption of
section 714 of article XI of the Constitution in 1911 con-
ferring upon counties the right to frame charters for their
own government, the counties of Los Angeles and San Ber-
nardino each framed a charter which was approved by the
legislature during its 1913 session. The charter of the
county of Los Angeles created the office of county counsel,
and assigned to that officer certain duties, which under the
general law had theretofore been performed by the district
attorney; also the office of registrar of voters, and assigned
to that officer duties which under general law had thereto-
fore been performed by the county clerk, and also the offices
of superintendent of charities and purchasing agent, assign-
ing to these officers duties which had theretofore been per-
formed by the board of supervisors. The charter of the
county of San Bernardino provided for a highway com-
missioner with powers and duties similar to those of road
commissioner, and also a purchasing agent, and made it his
duty to purchase all supplies required by the county and
its officers, a duty theretofore performed by the board of
supervisors. In 1917 the legislature approved a charter

Ss

prepared by the county of Butte and which provided for a
county road engineer, whose duties are similar to those
of the county engineer in the San Mateo County Charter.
Other instances where the people of a county have framed
a charter and the legislature has approved it, in which the
powers and duties which, under the general laws, are to be
performed by certain county officers, have been assigned to
some newly created office, will be found in the statutes of
the state. (Stats. 1927, p. 2029—County of Alameda; Stats.
1938, p. 3088—County of Sacramento.) It will thus be
seen that the contemporaneous construction placed upon
said constitutional provision by the legislature at its second
session after the adoption of said constitutional amendment
has been continued down to the present time. This con-
struction, followed and acquiesced in for a period of more
than twenty years, commencing soon after the adoption of
said constitutional amendment, is not to be lightly re-
garded by the courts. It is a contemporary interpretation
of a most forcible nature. In an early case this court so
held and aptly stated the rule in the following language:
“‘Contemporaneous exposition has ever been esteemed by
jurists and statesmen as strong evidence in support of an
interpretation or construction of a statute, or of a provision
of the organic law in consonance with such exposition.’’
(Knowles v. Yates, 31 Cal. 82, 89.) In a later case we
approved the rule thus announced earlier in our judicial
history, in the following language: ‘‘While the interpreta-
tion given to the act by the legislature is not controlling
upon this court as to the meaning of a provision of the con-
stitution, yet where it is doubtful the courts may, very prop-
erly, look to the contemporaneous interpretation given such
provision, either by the legislature or the courts.’”’ (Rail-
road Commrs. v. Market St. Ry. Co., 182 Cal. 677, 680
[64 Pae. 1065].) .

In the case just cited the court quotes with approval
the following from Endlich on the Interpretation of Statutes
(see. 527): “The greatest deference is shown by the courts
to the interpretation put upon the constitution by the legis-
lature in the enactment of laws and other practical applica-
tion of constitutional provisions to the legislative business,
when that interpretation has had the silent acquiescence
of the people, including the legal profession and the judi-

324 es

eiary, and especially when injurious results would follow
the disturbing of it. The deference due to such legislative
exposition is said to be all the more signal when the lat-
ter is made almost contemporaneously with the establish-
ment of the constitution, and may be supposed to result
from the same views of policy and modes of reasoning that
prevailed among the framers of the instrument thus ex-
pounded.’?

These expressions from our decisions apply most aptly
to the situation with which we are now confronted. As we
have seen, the Constitution was amended in 1911, giving
the counties the right to frame charters for their own gov-
ernment. In 1912 two counties of the state framed charters
thereunder and presented the same for approval to the
legislature at its session in 1913. They each contained pro-
visions similar to that in the San Mateo County Charter,
providing for the segregation of the duties of certain officers
and the bestowal of a part of said duties upon offices newly
ereated under the charter. The same may be said regarding
the charters of Butte, Alameda and Sacramento Counties.
The construction thus given to the constitutional amend-
ment has continued for over twenty years, and almost from
the date of its adoption, and no question has ever been
raised, with one exception to be later mentioned, to the
power of the county by charter to provide for the duties
of its officers different from and inconsistent with those
provided by the general laws. The contemporaneous con-
struction thus accorded to the constitutional amendment by
the legislature and those communities that have acted there-
under must, after the long lapse of time, in view of the
doubtful meaning of its provisions, be held to have fixed
and determined its meaning. The one exception above re-
ferred to will be found in the case of Woolwine v. Superior
Court, 182 Cal. 388 [188 Pac. 569], where the provision
of the charter of the county of Los Angeles was under
attack, which created the office of county counsel and as-
signed to that officer certain duties theretofore performed
by the district attorney. The case was decided upon an-
other point and the court refused to pass upon the legality
of the charter in so far as it created the office of county
counsel. The decision was rendered in March, 1920, and

since that time, in so far as the records of the appellate
courts reveal, the question has not been raised.

In the case of More v. Board of Supervisors, 31 Cal. App.
888 [160 Pac. 702], the court sustained the validity of the
charter of the county of San Bernardino, consolidating the
offices of sheriff and coroner. There is nothing in that
decision anywise helpful in the solution of the question
now before us. In Wilkinson v. Lund, 102 Cal. App. 767
[283 Pac. 385], the court declared illegal a provision of the
charter of the county of Butte which fixed a maximum tax
rate to be levied in said county for all purposes at two
eents on the dollar. The principle upon which that decision
was rendered was that a county may not incapacitate itself
to perform public functions, the exercise of which has been
delegated to it by the state, by providing in its charter such
a limitation of its tax rate as to render the performance
of such functions impossible. There is nothing in that de-
cision at variance with the views above expressed, although
there is certain language to be found in the opinion in that
ease which is in apparent conflict with our construction of
said constitutional amendment. That language was in no
way necessary to the decision and cannot be regarded as a
judicial determination of the matters with which it purports
to deal, and in so far as it conflicts with the views herein
expressed is hereby disapproved. In that case the court was
dealing entirely with public functions which had been dele-
gated to the county by the Constitution, and which it was
held the county could not by means of a charter incapacitate
itself from performing. The present proceeding is not con-
cerned with powers or duties of that character, but simply
with matters of local or county concern, and, as we have
seen, the duties of road commissioner are to take charge
of the roads of his district, and under the direction of the
board of supervisors to employ men and hire teams and
other necessary help to carry on the road work in his dis-
trict when the same is not let by contract. While the state
may have a general interest in the roads-and highways of
the counties it is not concerned with the particular indi-
vidual whose duty it is simply to employ the men and teams
and other help necessary to construct and repair such roads
and highways. These facts differentiate the present case
from that wherein the charter of the county of Butte was

26

involved, and furnish a basis for our statement that there
is nothing in the decision of the Butte County Charter case
in conflict with our conclusion that a county charter may
provide for powers and duties of county officers although
such powers and duties, as fixed by the charter, may differ
from and be in conflict with the powers and duties of such
officers as provided by the general laws of the state.

HI The general purpose of section 7% of article XT
of the Constitution was to give local self-government or
county home rule to counties of the state by means of char-
ters framed under said constitutional amendment. That
this was the intent and purpose of the section clearly ap-
pears from the language of the section itself, which declares
that, after the charter has been approved by the legislature
‘such charter shall become the charter of such county and
shall become the organic law thereof relative to the matters
therein provided ... and shall supersede all laws incon-
sistent with such charter relative to the matters provided
in such charter.’’ In the arguments prepared in support
of said constitutional amendment and sent to the voters of
the state immediately preceding the election at which the
amendment was adopted it was said, among other things:
“This proposal to amend the organic law occupying the
second place on the official ballot for the ensuing special
election on constitutional amendments, known as the ‘County
Home Rule Amendment’, is a logical growth from the suc-
cessful administration of ‘charter cities’ formed under the
‘Home Rule’ provisions of our constitution relating to
municipalities.’? Continuing the arguments, it is expressly
stated that “The main object of this amendment is to
place the local government of each county in the hands of
its citizens—in other words it is designed to give ‘home
rule’ to counties. The state Constitution in section 5, article
XI, authorizes the legislature to provide by general and
uniform laws for the appointment or election of boards of
supervisors... and other county... officers as public
convenience may require and prescribe their duties, fix their
term of office and their compensation.... The general
frame and structure of all county charters must be uniform,
and shall provide for the following matters only:

“*(a) For boards of supervisors their election, number,
term of office and compensation. Also for their general

i 327

regulation, their powers and duties, their removal from office
and filling of vacancies.”

The people of the state in the adoption of this amend-
ment had good cause to believe, and evidently did believe,
that they were thereby providing a means whereby they
might have home rule in their local and county affairs,
including the right, in the words of the amendment, to
provide for the powers and duties of their county officers.
The amendment as adopted by them, when construed as a
whole, is not only susceptible of such a construction, but
cannot be given any other reasonable interpretation.
Hi It is therefore our opinion that the provision of the
charter of the county of San Mateo which transfers the
duties of road commissioners from the members of the
board of supervisors of said county to, and confers such
duties upon, the county engineer, is a valid and constitu-
tional charter enactment, and governs and determines the
official of said county who shall perform and exercise such
duties.

The petition is denied.

Langdon, J., Preston, J., Waste, C. J., Shenk, J., and
Thompson, J., Concurred.

[Sac No. 4789, In Bank—Mareh 1, 1984.]

J. D. OLIVER, Plaintiff, v. FRANK A. SPERRY et al.,
Defendants; CARRIE EVELYN SPERRY et al., Re-
spondents; MARIE C. CARPENTER, as Executrix,

ete., Appellant.

ry
ic)
eo

A. H. Carpenter and Frederick L. Fenton for Appellant.

Louttit, Marceau & Louttit, George E. Frioux and Ed-
ward E. Breitenbucher for Respondents.

SHENK, J.—J. E.. Oliver, the surviving husband of
Harriet A. Oliver, deceased, brought this action to partition

; Es 329

certain real property in San Joaquin County owned in
part by the deceased wife in her lifetime. An interlocutory
decree was entered which determined the right of the re-
spective parties and ordered partition as follows: One-
fourth interest to J. E. Oliver; one-fourth interest to
Charles Elmer Miller, son by a former marriage and only
surviving issue of Harriet A. Oliver, deceased; and one-
half interest to Carrie Evelyn Sperry. Charles Elmer
Miller appealed from the interlocutory decree, contending
that Harriet A. Oliver had no interest in the property,
and that as a consequence the surviving husband had no
interest. The interlocutory decree was affirmed. (Oliver
v. Sperry, 97 Cal. App. 27 [274 Pac. 1030].) The referees
appointed by the court in the interlocutory decree filed
their report dividing the property in accordance with the
terms of the interlocutory decree. Thereafter A. H. Car-
penter was permitted to intervene and set up an assign-
ment to him of the interest of Charles Elmer Miller. The
report of the referees was confirmed and a final judgment in
partition was entered wherein property representing a
one-fourth interest was allotted to Carpenter; property
representing a one-half interest was allotted to Carrie
Evelyn Sperry; and property representing a one-fourth
interest as allotted to Minnie Bruse Oliver, executrix of
the last will and testament of J. E. Oliver, deceased. Car-
penter has appealed from the final judgment on the judg-
ment-roll alone, claiming error in those portions of the final
judgment, (1) which set apart a one-fourth interest in
the property to Minnie Bruse Oliver, as executrix; (2) which
determined that Carpenter was bound to pay certain charges
which were a lien on the interest of Charles Elmer Miller,
his assignor, and his proportion of attorney’s fees and costs;
and (8) which determined that J. E. Oliver was entitled
to commence the action.

Considering the last point first: Upon the death of
his wife, J. E. Oliver was vested with an interest in the
property. (Sec. 1386, subd. 1, Code Civ. Proc. see. 221,
Prob. Code.) On the record presented he was such owner
as a tenant in common with the other owners. He was
therefore authorized to commence the action under section
152 of the Code of Civil Procedure. J Furthermore,
this question and the question of the interests of the re-

380 es —

spective parties were finally adjudicated by the interlocutory
decree. (Pista v. Resetar, 205 Cal. 197 [270 Pac, 453].)
Only such matters may be reviewed on appeal from the
final judgment as have intervened subsequent to the rendi-
tion of the interlocutory decree. (Gutierrez v. Hebberd,
106 Cal. 167 [39 Pac. 529].)

As to assignment No. 1, the record shows that J. BE.
Oliver died after the interlocutory decree became final but
before the final decree was entered. The executrix was
duly substituted in his place, and the interest of J. E.
Oliver allotted to her as executrix. Carpenter attempts to
base his claim of error on the rule that an executor or ad-
ministrator of the estate of a deceased owner has not such
interest in the land as to entitle him to institute partition
proceedings. (See Ryer v. Fletcher Ryer Co., 126 Cal. 482
[58 Pac. 908].) But that rule does not apply where the
proceeding is properly commenced and the executor or ad-
ministrator of the deceased plaintiff is substituted into the
ease. In the event of the death of a party the proceedings
are not ‘‘delayed or suspended’’, and the legal representa-
tives may come in by substitution. (Sec. 763, Code Civ.
Proe.)

Hy Assignment of error No. 2 is also without merit
Prior to the acquisition by Carpenter of the interest of
Miller, the defendant Carrie Evelyn Sperry acquired by
assignment two judgments against Miller. According to the
record here presented these judgments were liens against
Miller’s interest in the land before Carpenter acquired such
interest. The court made the allotment to Carpenter sub-
ject to these liens. Miller’s interest was subject to them
and they could not, of course, be removed by his voluntary
assignment to Carpenter. In other words, Carpenter ac-
quired only the interest which Miller had (sec. 766, Code
Civ. Proe.), and he took the burdens with the benefits.
HH The proportionate share of the attorney’s fees and
costs was properly chargeable to Carpenter. (See. 796,
Code Civ. Proc.)

The judgment is affirmed.

Thompson, J., Curtis, J., Langdon, J., Preston, J., Waste,
C. J., and Seawell, J., concurred,

331

(8. PF. No, 14721, In Bank.—Mareh 1, 1934]

UNION SUPPLY CO. (a Corporation), Respondent, v.
GOUVERNEUR MORRIS et al. Appellants.

S. H. HOOKE et al, Respondents, vy. GOUVERNEUR
MORRIS et al., Appellants.

SS 23a

W. C. Theile for Appellants.

Silas W. Mack, John Thompson and J. W. Lenahan for
Respondents.

THE COURT.—Defendants Gouverneur Morris and
Ruth J. Wightman Morris, his wife, appeal from a judg-
ment decreeing foreclosure of mechanics’ and materialmen’s
lien on property in the city of Monterey, this state, record
title to which stands in the name of Mrs. Morris. By said
judgment the court decreed that defendants were indebted
to plaintiffs S. H. Hooke and W. BE. Hooke, building con-
tractors, in the amount of $15,518.98, which represents the
full balance due said contractors upon an oral agreement
for the construction of extensive additions to appellants’
residence, by the terms of which the contractors were to be
paid all costs of construction plus ten per cent. The court
adjudged that said contractors had a lien for $14,897.60,
and that the balance of $621.38, which was the amount un-
paid on the architect’s fee, was unsecured because not in-
cluded in the claim of lien filed. The judgment further
decreed that the Union Supply Company, plaintiff in a suit
separately filed, but consolidated for trial with the action
brought by the contractors, held materialmen’s and sub-
contractors’ liens upon the Morris property for the amount
of $11,670.69. This company furnished lumber which was
used in the work of improvement, and was found by the
court to be the holder by assignment of the claims of other
materialmen and subcontractors in the total amount of
$6,255.65. By reason of the fact that the sum of $15,-
518.98 found due the contractors, S. H. Hooke and W. E.
Hooke, includes the amounts required to discharge all un-
paid materialmen’s and subcontractors’ claims, the judg-
ment provided that all payments made upon the judgment
in favor of the Union Supply Company should pro tanto
reduce the judgment in favor of the contractors.

A short time prior to June 5, 1930, the Morrises ap-
proached Mr. S. H. Hooke with reference to the construc-
tion of extensive alterations and additions to their residence,
the nucleus of which was an adobe structure surviving from
pioneer days and modernized to suit their needs. The
grounds surrounding the residence cover almost an acre.

384 ees =|

The plans for the new addition are not before us on this
appeal, but it, sufficiently appears from the testimony that
the new wing built by the contractors herein constituted
the central and by far the larger portion of the house as
reconstructed. At their first conference Mr, and Mrs. Mor-
ris exhibited to Mr. Hooke a pencil sketch of a floor plan
which they had drawn themselves. Mr, Hooke drew certain
floor plans to scale. He advised the employment of an
architect, and at his suggestion the services of Mr. Wesley
Hastings were obtained. On or about June 5, 1930, the
contractors commenced work. At that time the plans had
not been completed, nor all details of the construction
agreed upon. .
The arrangement between the Morrises and Mr. Hooke
was that he should be paid all costs of construction, in-
cluding material, labor and incidental costs, plus ten per
cent of such costs for supervising the improvement. W. E.
Hooke is the son of S. H. Hooke. All negotiations were
had with the elder Hooke, who had been a builder on the
Monterey peninsula for many years and had previously
done some work for the Morrises. Hooke testified that the
Morrises did not fix any limit as to the price of the con-
templated improvement. After the architect had made
some drawings, Hooke made an estimate of $22,000-$25,000,
which did not include the contractors’ profit of ten per
cent and was necessarily nothing more than a mere rough
estimate, since the plans were far from complete. Mr. Mor-
ris claims that he definitely informed Hooke that it would
be necessary for him to borrow funds with which to build;
that he could not borrow more than $25,000 and expected
with that sum to buy furnishings, as well as to construct
the building. According to Morris it was definitely agreed
that the cost of the building, including the contractors’
commission, should not exceed $22,000, but that if it should
cost less the owners should have the advantage of the sav-
ing. The actual costs of construction, found by the trial
court to be reasonable, totaled $40,297.22, including the
contractors’ commission of ten per cent, of. which sum the
Morrises had paid $24,778.24, leaving the balance of $15,-
518.98 unpaid.
Upon this appeal appellants Mr. and Mrs. Morris
contend that the testimony of S. H. Hooke that the contract

es 285

price was not fixed at $22,000 is too inherently improbable
to be given credence, and that as they have already paid
a sum. exceeding that figure they are indebted to the Hookes
in no amount whatsoever. Any price limitation in the oral
agreement between the owners and the contractors would
not be binding upon materialmen and subcontractors, who
in good faith and without notice thereof furnished materials
or performed labor. The owner’s liability is limited by the
contract price only where the contract is recorded and a
bond filed as provided by section 1183 of the Code of
Civil Procedure. (17 Cal. Jur, pp. 47, 57.) [J In de-
fense of the contractors’ demand, and by way of counter-
claim to secure damages against the contractors in the event
it should be determined that the unpaid materialmen’s and
subcontractors’ claims held by the Union Supply Company
constituted valid liens against their property, the Morrises
alleged that plaintiff S. H. Hooke falsely and fraudulently
represented that the addition could be completed for
{$22,000, when he well knew that it would cost far more.
They further alleged that the actual costs of construction
were far in excess of the reasonable costs because of the
misconduct and negligence of the contractors in permitting
materialmen and subcontractors to charge the highest pos-
sible rates, thereby increasing their own commission, and
that the contractors were further guilty of negligence and
misconduct in failing to inform them fully of the building
costs from time to time during the progress of the work.
The court found for the contractors as to these several
issues raised by the answer and counterclaim of appellants.
There is no evidence in the record which will sustain the
charge that the contractors falsely and fraudulently gave
a low estimate. On the question whether the figure of
$22,000 was understood to be a mere estimate or a fixed
limitation as to the maximum cost of construction, the trial
court accepted the testimony of Hooke that it was a mere
preliminary estimate. It seems improbable that he would
have been willing to agree to a fixed limit at a time when
the plans were far from complete and important items in
the construction had not been decided upon. Mrs. Morris
left Monterey on a trip to the South Seas a few days after
construction commenced and did not return until about
the time the building was completed, but Mr. Morris con-

386 |

tinued to reside on the premises. He was very active in
observing all details of the construction and had very
definite ideas as to what he desired. From time to time
changes were made in the plans drawn by architect Hast-
ings, and in a number of instances after certain portions
of the work had been done in accordance with the direc-
tions of Morris he decided that something else would be
preferable and the work was done over. The conduct of
Morris, as testified to by Hooke and by the subcontractors
and materialmen, indicates that his insistence throughout
was that everything, down to the smallest detail, should
be exactly as he and Mrs. Morris desired it, and that said
contractors and materialmen were. warranted in inferring
that price was not a major consideration.

The court’s findings that the several claims held
by the Union Supply Company represented the reasonable
value of the materials furnished and labor performed, nega-
tive the contention of appellants that the contractors by
negligence and misconduct permitted the charges for said
labor and materials to exceed their reasonable value. Said
findings were based on the testimony of the persons and
firms by whom the materials were furnished and services
rendered to the effect that in all cases their bills were based
on the prevailing retail prices and wage scales on the
Monterey peninsula.

Objection is made on the ground that certain of the bills
rendered by the materialmen and subcontractors did not
contain an itemized account of the materials furnished
and hours of labor rendered. The failure of the contrac-
tors to demand such itemized statements was one of the
charges urged against them in a complaint filed by the
Morrises with the Department of Professional and Voca-
tional Standards and Registrar of Contractors. The build-
ing procedure adopted was not calculated to produce a
building in the most economical manner. Specifications
were not prepared in advance, nor was a building contract
fixing a definite price drawn up. Competitive bids were
not sought on materials and subcontracts. However, the
construction without a formal contract or competitive bids
was fully acquiesced in and agreed to by Mr. Morris, and
it was at his request that work was commenced before the
plans were completed. It is true that the contractors, in
protecting the interests of the owners, should have main-

es 337

tained a closer check on the prices of materialmen and sub-
contractors. But in view of the finding of the trial court
that the rates charged were reasonable, it cannot be said
that the owners have suffered actionable damage.. It is
likewise true that the contractors should have rendered
more complete statements to the owners during the progress
of the work, but their omission in this particular is in-
sufficient to relieve the owners from paying the reasonable
value of materials and services which actually went into
the building. It is agreed that its construction is superior,
both as to workmanship and materials.

Hl in support of their charge of fraud and negligence,
appellants cite certain incidents. Respondent Hooke ac-
cepted a ten per cent rebate, amounting to $117, on the
price charged the owners for certain hardwood. He at-
tempted to justify this rebate on the ground that it had
been necessary to make a number of trips to San Francisco
in connection with procuring the wood. We cannot ap-
prove of the acceptance of this rebate. However, there is
no evidence that he received a rebate in any other instance.
He testified that he had not received a rebate from any
other source, and the several materialmen and subcontrac-
tors who appeared upon the trial all testified that he had
not asked for nor received rebates from them. As to the
destruction of the time cards kept upon the job, the testi-
mony was that they were turned in to the contractors’ office
at least once a week, posted in a permanent time-book, and
then destroyed in accordance with the usual custom of the
office. It also appeared that Hooke failed to give the own-
ers eredit for lumber of the value of $53 returned to the
lumber-yard. But he testified that this was through inad-
vertence, and the error was corrected on the trial. These

. incidents fall far short of establishing a general fraudulent
intent.

HI Appellants also contend that the lien claims of
respondents were filed too late. Where the owner fails to
record a notice of completion, lien claims may be filed
within ninety days after completion of the work of improve-
ment, (Sec. 1187, Code of Civil Procedure.) The claims
herein were filed on February 17, 1931, which is just within
the ninety-day period provided there is evidence in the
record to sustain the court’s finding that November 20,
1930, was the date of completion. Although the foreman

a .

388 ere

left the job on October 31, 1930, and the Morris family
commenced to oceupy the bedrooms in the new addition
about that time, there is evidence that one Herrera, a
laborer who had been working on the job, remained and
received his wages from Hooke, and also that certain elee-
trical fixtures were installed on November 20th. Although
the work done after October 31st was principally outside
the building, and consisted of completing the cistern, lay-
ing sidewalks and putting in drain-pipes, the work of im-
provement as undertaken by Hooke included work outside
the building. A cesspool was built, drain-pipes were
changed, grading and excavating were done, sidewalks
placed, and an approach to a driveway constructed. It
cannot be said that as a matter of law the trial court’s find-
ing that November 20, 1930, was the date of completion is
without evidentiary support.

The court did not err in denying the motion for a
new trial. The averments of the affidavits filed by appel-
lants in support of their motion were controverted in the
counter-affidavit filed on behalf of the respondent contrac-
tors. The trial court resolved the conflict in favor of
respondents and its action cannot be disturbed by an appel-
late court.

HI Appellants further contend that plaintiff Union
Supply Company has no lien rights upon the claims of the
several matcrialmen and subcontractors of which the court
found it to be the assignee, for the reason that the assign-
ments by which it claims were made orally, and there
were no written assignments of the liens. It is contended
that a mechanic’s lien is an ‘interest in real property which
ean be transferred only by instrument in writing. It is
settled in this state that a mechanic’s lien, like a mortgage
or judgment lien, is a mere incident of the debt secured |
and cannot be transferred apart therefrom. (Duncan v.
Hawn, 104 Cal. 10 [87 Pac. 626]; Rawer v. Fay, 110 Cal.
361 [42 Pac. 902] ; California P. C. Co. v. Wentworth Hotel
Co., 16 Cal. App. 692 [118 Pac. 103, 118]; Pitman v.
Walker, 187 Cal. 667 [203 Pac. 739]; 17 Cal. Jur. 158; 3
Cal. Jur. 279; Coon v. Shry, 209 Cal. 612 [289 Pac, 815];
18 Cal. Jur. 86.) Section 1084 of the Civil Code provides:
“The transfer of a thing transfers all its incidents, unless
expressly excepted; ...’’ As to mortgage liens, there is
a further specific code section which provides that ‘‘the as-

a 339
signment of a debt secured by mortgage carries with it the
security’’. (Sec. 2936, Civil Code.) It follows ‘from the
principle that the lien is an incident of the debt and passes
with it by operation of law, that an express assignment of
the security is not required. It passes with the debt which
it secures, and an assignment which is sufficient to transfer
the debt must carry with it the mortgage or other lien.
In Martin v. Mowlin, 97 Eng. Rep. 658, 663, the English
court declared:

“A mortgage is a charge upon the land; and whatever
would give the money, will carry the estate in the land
along with it, to every purpose. The estate in the land is
the same thing as the money duc upon it. It will be liable
to debts; it will go to executors; it will pass by a will not
made and executed with the solemnities required by the
statute of frauds. The assignment of the debt, or forgiv-
ing it, will draw the land after it, as a consequence, nay,
it would do it, though the debt were forgiven only by
parol; for the right to the land would follow, notwithstand-
ing the statute of frauds.”’

In this state it has been held that the assignment of a
note, or. its indorsement and delivery, or delivery alone,
carries with it a mortgage given as security therefor, al-
though said mortgage covers real property. (Hurt v. Wil-
son, 38 Cal. 263; Druke v. Heiken, 61 Cal. 346 [44 Am.
Rep. 553]; Phelan v. Olney, 6 Cal. 478; Bennett v. Solo-
mon, 6 Cal. 184; Gessner v. Palmateer, 89 Cal. 89 [24 Pac.
608, 26 Pac. 789, 13 L. R. A. 187].)

There is no requirement that an assignment of a debt
due a mechanic or materialman must be in writing. The
code provides that ‘‘a transfer may be made without writ-
img in every case in which a writing is not expressly re-
quired: by statute’. (See. 1052, Civil Code.) It follows
that a valid oral assignment of the claim due the mechanic
earries with it the lien which is an incident thereto. The
early decision in Ritter v. Stevenson, 7 Cal. 388, holding
that an assignment of a mechanic’s lien must be in writing,
is inconsistent with our later decisions covering mortgage
liens on real property, and at variance with the principle
that a lien is but an incident of the debt and follows a
valid assignment of the debt.

340 Le 7

If a mechanic’s lien or a mortgage lien can be said to
be an interest in real property within the meaning of sec-
tion 1971 of the Code of Civil Procedure, said section never-
theless provides that an interest in real property cannot be
transferred otherwise than ‘‘by operation of law’’, or by
instrument in writing. An assignment of the debt for
which the lien is security by operation of law carries with
it the security.

The judgment is affirmed.

[Sac. No. 4840. In Bank.—March 3, 1984.]

ROLLAND A. VANDEGRIFT, Petitioner, v. RAY L,
RILEY, Respondent.

4a a —
CC

‘Webb Shadle for Petitioner.

U. S. Webb, Attorney-General, Robert W. Harrison,
Chief Deputy Attorney-General, Jess Hession and W. R.
Augustine, Deputies Attorney-General, for Respondent.

SHENK, J—The petitioner, as state director of finance,
seeks a writ of mandate to compel the respondent state
controller to audit and approve six demands transferring
certain amounts from the emergency fund to the funds of
the departments in whose favor the demands are drawn.
The demands may be briefly referred to as follows:

(1) For salary and expenses of chief of division of ser-
vice and supply, for the eighty-fifth fiscal year, $6,500.

(2) For the support of the bureau of commerce, $2,415.

(8) For: additional expenses of conference of governors,
$3,000.

(4) For the division of narcotic enforcement, $36,570.

(5) For division of social welfare, $38,000.

(6) For department of public works, division of water
resources, $12,500.

As to the first two items no specific appropriations were
made by the legislature in 1933. As to the remaining four
items appropriations for the several departments or pur-
poses were made in 1933, but were found by the director of

Cc ll 343

finance to be insufficient. Each item of transfer from the
emergency fund was accompanied by an executive order of
the department of finance, by the director of finance as its
executive officer. Hach order recited that a contingency
had arisen in the administration of the particular depart-
ment or purpose and that the transfer was ‘‘imperative for
the protection of the public welfare’.

The primary consideration is a determination of the
power of the department of finance in the premises. This
consideration involves in a general way the legislative his-
tory of the emergency fund as employed in the fiscal ar-
rangements of the state and the application of that fund
in connection with the budget plan of the expenditures
of the state.

An emergency fund was first established in the general
appropriation act of 1911 (Stats. 1911, p. 1870), wherein
it was provided: ‘‘For emergency fund to be expended only
upon unanimous vote of the board of control, approved by
the controller, seventy-five thousand dollars’? An identical
appropriation was included in the general appropriation act
of 19138. (Stats. 1913, p. 1334.) In 1915 the amount ap-
propriated for this purpose was $100,000. (Stats. 1915, p.
627.) In 1917, $1,000,000. (Stats. 1917, p. 507.) In 1919,
$250,000. (Stats. 1919, p. 1329.) In 1921, $400,000. (Stats.
1921, p. 1717.) In 1928, $700,000. (Stats. 1923, p. 257.) In
1925, $1,000,000. (Stats. 1925, p. 59.) In 1927, $1,000,000.
(Stats. 1927, p. 277.) In 1929, $1,500,000. (Stats. 1929, p.
96.) In 1981, $1,500,000. (Stats. 1931, p. 318.) The 1933 ap-
propriation for emergency fund will be specially noted
later on.

Every general appropriation act prior to 1923 was en-
titled: ‘‘An act making appropriations for the support of
the government of the state of California’? for the par-
ticular biennial period. In November, 1922, section 34 of
article IV of the Constitution was amended to provide for
a state budget and a budget bill. Thereafter and com-
mencing in 1923 the title of the general appropriation act
has been entitled: ‘‘An act making appropriations for the
support of the government of the state of California and
for several public purposes in accordance with the provi-
sions of section thirty-four of article four of the Constitu-
tion.’’? The title of these general appropriation measures

oad es —

will become significant in connection with certain conten-
tions of the respondent to be hereinafter noted. Prior to
1923 every general appropriation act, in section 4 thereof,
provided that ‘‘not more than one twenty-fourth of the
amount appropriated under the act for each department or
institution for the two years . . . shall be expended during
any one month without the consent of the state board of
control, and not more than one half of such appropriation
shall be expended during [each] fiscal year, unless the
same has been expressly authorized by this act’. In 1923
said section 4 was worded so as to insert after the words
“department or institution’? the words ‘‘for support and
salaries”’, and the language of the 1923 statute was con-
tained in the act of 1925. In 1927 the words ‘‘for sup-
port’? were used and the words ‘‘for salaries’? were elimi-
nated. In 1929 and 19381 the section carried the same
language as in 1927, except that the prohibition against
the expenditure of not more than one twenty-fourth of the
appropriation in any one month was eliminated.

Prior to 1921 the prohibitions contained in section 4 of
each act were applicable to each item of appropriation, in-
eluding the emergency’ fund. In the act of 1921 and in
each subsequent act the expenditures from the emergency
fund have been expressly exempted from the provisions of
section 4,

The 1933 appropriation for the emergency fund is as fol-
lows: ‘‘Item 201—For emergency fund, five hundred thou-
sand dollars — $500,000—(exempt from section 4 of this
act) to be expended only on written authorization of the
state department of finance for emergencies. Emergencies
within the meaning of this provision are hereby defined as
contingencies for which no appropriation, or insufficient
appropriation, has been made by law.

“Ttem 202—For special emergency fund, two hundred
fifty thousand dollars—$250,000—(exempt from section 4
of this act) to be expended only on written authorization of
the state department of finance for augmentation of appro-
priations for support of the state prisons, state hospitals,
and other state institutions, when and if commodity prices -
increase during the eighty-fifth and eighty-sixth fiscal
years.’? (Stats. 1933, p. 814.) Section 4 of the act of
1938 provides: ‘‘The appropriations under this act shall,

ee 345

unless otherwise provided, be subject to the provisions of
section 677a of the Political Code...”

By the budget amendment to the Constitution in 1922
(Const., sec. 84, art. IV), the Governor was required,
within the first thirty days of each session of the legislature
to submit to the Icgislature a budget containing a complete
plan and itemized statement of all proposed expenditures
of the state provided by law or recommended by him, and
of all its institutions, departments, boards, bureaus, com-
missions, officers, employees and other agencies, and of all
estimated revenues for the ensuing biennial period, and to
submit with the budget a budget bill covering the proposed
expenditures. Obviously the preparation of a budget so
required involved great detail, as well as a high degree of
judgment and discretion. Prior to 1929 the Governor was
assisted, in the preparation of the budget, by the depart-
ment of finance, then under the management of the state
board of control. In 1927 article XVIII of part IU, title
I, chapter III (sections 654-691) of the Political Code was
redrafted. It was therein provided (sec. 654), that the
department of finance ‘‘shall have general powers of super-
vision over all matters concerning the financial and business
policies of the state’. In section 655 it was provided that
“the department shall be under the control of an executive
officer to be known as the director of finance, which office
is hereby created’’, Since that time the department of
finance and the director thereof have assisted in the prepara-
tion of the budget.

By the foregoing legislation, enacted prior to 1933, the
director of finance has been given broad powers of super-
vision over state expenditures and by such legislation has
become an important factor in preparing the budget and
in enforcing the budget provisions of the Constitution and
statutes. In fact his department is an integral and es-
sential part of the budget machinery of the state. The
preparation of the budget by the Governor with the assis-
tance of the department of finance, forms the foundation
of the appropriation bill thereafter to be considered by the
legislature and to be enacted. In the preparation and enact-
ment of such a budget and budget bill absolute precision in
the amount which many departments of the state will re-
quire during the ensuing biennial period is an impossibility

a6 ee —

and cannot be expected. In many instances it is only an
estimate. The inclusion of a substantial sum in each appro-
priation bill enacted in the last twenty-five years and
specially designated ‘‘for emergency fund’’ was undoubtedly
with the idea in mind that it would in all probability
eventuate that an appropriation for a particular department
or purpose would be insufficient, or that a necessary public
purpose for which no appropriation had been made would
have to be provided for prior to the enactment of the next
budget bill. To provide for such event the emergency fund
has been established in each succeeding appropriation bill,
to be allocated and expended with the approval of the
executive officers and fiscal agents of the state, first in 1911
with the approval of the state board of examiners, then
with the approval of the state board of control and now
by the department of finance, through its executive officer,
the director of finance, who is the successor in authority as
to such matters of the state board of control.

Between 1909 and 1933, emergency funds in the aggregate
amount of $7,100,000 were included in the regular ap-
propriation bills and were allocated to the several depart-
ments of the state government or for necessary state pur-
poses by and under the authority of the fiscal agents of the
state, in many instances to supplement the appropriations
regularly made to said departments or purposes and in some
instances for state purposes where no appropriations had
been made. When allowances have been made from the
emergency fund to supplement the appropriation made by
the appropriation bill to a state department for maintenance
and support, which appropriation was found by the fiscal
agencies of the state to be insufficient, such allowance from
the emergency fund has been expended by such departments
the same to all intents and purposes as if the supplemental
allowance had been made a part of the regular appropriation
for said departments. The establishment and distribution
of an emergency fund under this plan and procedure was
no doubt in recognition of the fact that without such a
method of balancing the funds required for the several de-
partments of the state and for other state agencies and
purposes, the appropriations under the old plan were in-
flexible and the new plan was intended, at least in part, to
avoid the enactment of separate and independent contingent
expense bills and appropriations found necessary under the

ee 347

old system. The emergency funds thus established have
been allocated and disbursed during the last twenty-five
years on the authority and order of the fiscal agents of the
state government without let or hindrance on the part of
the courts, and, so far as we are advised, without question,
until a controversy arose between the then director of finance
and the then and present state controller as to whether
premiums on insurance policies to indemnify the state against
liability for damages arising out of the negligence of officers,
agents, and employees of the state and other public agencies
in the operation of motor vehicles could be paid from the
emergency fund. It appeared in that case that section
1714% of the Civil Code, establishing such liability on the
part of the state and the other enumerated public agencies,
had been enacted by the legislature after the findl adoption
of the general appropriation bill in 1929, and no appropria-
tion had been made therein for that purpose. No fund was
therefore available out of which to pay premiums on in-
demnity insurance policies. The director of finance ordered
the policies and directed that the premiums therefor
be paid from the emergency fund. The controller re-
fused to approve the claim on the ground that no appropria-
tion had been made in the general appropriation bill for
that purpose, and that the emergency fund carried in the
general budget bill could not be drawn upon for such pay-
ment. In passing upon the contention this court quoted the
language of the 1929 item of the general appropriation
measure ‘‘for emergency fund’’, which item is in the same
language (except as to the amount), as the item in the
appropriation for emergency fund in the 1933 statute, and
through the chief justice stated:

“Tt has been the practice in this state for many years
for the legislature to include a similar provision in the
general appropriation act, thus providing for the payment
of emergency claims against the state and its activities,
rather than subject the departments of the state and its
officers to embarrassment in the administration of the state’s
business, and put claimants to the annoyance and uncer-
tainty of having to depend upon subsequent legislatures for
reimbursement for services and supplies furnished. The pur-
pose and policy of such an appropriation in the general
budget bill has gone unquestioned during the time many
legislatures have met. The plan seems meritorious and, so

348 Le |

far as we are given to understand, it has not been chal-
lJenged heretofore in its general application. We see no
good reason, therefore, for now saying that it is not a
proper plan to pursue, provided, of course, the demands
against the emergency fund are just and reasonable. The
definition in the act of what circumstances shall be sufficient
to give rise to an ‘emergency’, subjecting the emergency
fund to a valid demand, seems to us to be logical and rea-
sonable. We see no reason why it may not be held that the
present situation presents an ‘emergency’ within the intent
and definition of the legislature. . . . In the instant case the
legislature has set aside a definite sum, to-wit, one million
dollars, for the payment, among other things, of ‘contin-
gencies for which no appropriation has been made’, We
think the use of the word ‘contingencies’ is sufficiently gen-
eral to include a situation like the one here presented. As
to the wisdom of such a course—a question suggested by
the respondent—of reposing such a power in the hands of
an executive officer of the state, that is a matter resting
solely with the legislature’? (Heron v. Riley, 209 Cal.
507 [289 Pac. 160].)

Prior to 1927 the state board of control, under section
680 of the Political Code, had power with the consent of
the Governor, to authorize the creation of deficiencies in
any appropriation made by law in cases of necessity; and
to authorize the payment of such deficiencies out of any
other money which might be legally appropriated in aid of
the proper functioning of the department in whose ‘behalf the
deficiency was declared. In a controversy between the board
of fish and game commissioners and the state controller,
wherein the board of control acting under said section 680
had authorized the creation of a deficiency in behalf of said
board, and had ordered for its support and maintonance
substantial sums in excess of the amount appropriated to it’
in the regular appropriation act for the current year, this
court held that the purpose of said section 680 was’ to
empower the board of control with the Governor’s consent
to render legal the expenditure of money by boards and
officers of the state for their proper functioning and in
excess of the specific amount provided by the legislature in
the regular appropriation measure when the budget allow-
ance was exhausted and the necessity for such further ex-
penditure appeared. It was also held that it was within the

i 349

power of the legislature to confer authority on the board
of control thus to transfer moneys from one fund to an-
other in order that the several departments and officers of
the state might properly function. (Board of Fish and
Game Commissioners v. Riley, 194 Cal. 87 [227 Pac. 775].)
Section 680 of the Political Code was repealed in 1927, but
was continued in effect by its re-enactment the same year
as section 661 of the Political Code, except that the powers
vested in the board of control under the repealed section
were vested in the director of finance by the re-enactment.
The authority granted in that section is analogous to the
power vested in the director of finance by item 201 of the
budget enactment of 1933.

Hi That the amount set aside ‘‘for emergency fund’”’
during the successive sessions of the legislature is an appro-
priation within the contemplation of the budget amendment
to the constitution and statutes enacted pursuant thereto,
cannot be doubted. When so appropriated it becomes part
of the funds set aside for the proper functioning of the
state government and its several departments, offices and
purposes, The administration of the emergency fund prior
to 1929 was committed to the discretion of the state board
of control under specific provisions contained in the appro-
priation for that purpose. In 1929 that power was trans-
ferred to the department of finance (Stats. 1929, p. 96),
and the executive officer of that department appears to be
the sole state official to whom the legislature has delegated
the power to administer the fund. There is nothing incon-
sistent with the budget plan in conferring such power upon
this officer. In fact the power to apportion the fund,
through the exercise of a sound discretion on his part,
would seem to permit a flexibility in the handling of the
state’s funds not otherwise attainable and thus tend to as-
sure a practical operation of the budget plan. It is in the
exercise of his discretion that the petitioner is now attempt-
ing to transfer funds from the emergency appropriation to
the funds of the several offices, departments and agencies
enumerated in the petition pursuant to an allegation, ad-
mitted by the demurrer of the respondent, filed as a return
to the alternative writ, that in the judgment of the director
of finance an emergency has arisen. in that no appropriation.
or an insufficient specific appropriation has been made for

350 Le 7

the proper functioning of those state agencies by the legis-
lature in 1938. It is not contended by the respondent that
diseretion has been improperly exercised by the petitioner,
provided he has the power in each particular instance to
exercise that discretion. [J It is conceded by the re-
spondent that the determination of whether an emergency
exists involves questions of fact. The ascertainment of those
facts naturally devolves upon the department of finance.
‘When the facts are ascertained the exercise of discretion
thereunder will not be disturbed by the courts unless a lack
of power to exercise the same or an abuse of discretion is
made to appear. And it is apparently conceded that the
state board of control, at least prior to 1927, had the power
and discretion now sought to be exercised by the petitioner
in the distribution of the emergency fund. But it is in-
sisted that by reason of the definition of ‘‘emergencies’’ con-
tained in the statute, the power has been denied the depart-
ment of finance to allocate that fund or any part thereof
to the support of the several departments of the state
government for whose support a specific appropriation has
been made in the budget enactment.

Prior to 1927 the statute did not define the term
“‘emergencies’’. That term was first defined in the item of
appropriation for emergency fund by the legislature of
1927 as follows: ‘‘Emergencies within the meaning of this
provision are hereby defined as contingencies for which no
provision or insufficient provision has been made by the
appropriations herein contained.’’? During the succeeding
biennial period the board of control administered the emer-
gency fund in accordance with the definition thus laid down.
In doing so the board very naturally first ascertained
whether no provision had been made by the specific appro-
priations in the budget enactment or whether an appropria-
tion had been made for the particular purpose and was
insufficient. It then determined in the exercise of its disere-
tion whether the transfer from the emergency fund was
necessary to the proper functioning of the state government.

The respondent’s contention resolves itself to this:
That the word ‘‘contingencies’’ cannot comprehend the
usual, current, necessary expenses of a department or office,
even though the specific appropriation made be obviously
and entirely insufficient. The foregoing definition in the

ee 51

1927 statute would not justify the limited application of
the term thus sought to be placed upon it. On the contrary
the definition in plain terms presupposes cases where no
appropriation has been made for necessary state purposes
or where an insufficient appropriation has been made in the
budget enactment itself. The argument of the respondent
is that the contingency must be an event which the legisla-
ture in the enactment of the budget bill did not have in
mind and consider, and that all items of expense which
were specifically considered must be excluded from con-
sideration. As indicated the language of the definition of
the term ‘‘contingencies’’ in the statute of 1927 definitely
discloses that the legislature had in mind that some of the
specific appropriations made would be insufficient for the
purpose intended without any limitation which would ex-
elude support and maintenance, and provided for such con-
tingencies by placing the emergency fund at the disposal
of the department of finance to be used in all proper cases.

Item No. 202 of the 1933 budget enactment, providing for
a special emergency fund, confirms the conclusion that the
use of the general emergency fund—item No. 201—for sup-
port was not excluded. In making the appropriation of
this special emergency fund it was contemplated that com-
modity prices might increase during the two years next
ensuing and that the specific appropriation for the ‘‘sup-
port’’ of the state prisons, state hospitals, and other state
institutions might be insufficient. To provide against such
a depletion of the general emergency fund during the
ensuing biennial period as would jeopardize the proper sup-
port from that fund of such state institutions, in the event
of a rise in commodity prices, this special emergency fund
was in terms set apart for the ‘‘support’’ of those institu-
tions, to meet such a contingency. The language of item
202 is a distinct recognition that emergency funds might
be used for ‘‘support’’ if the specifie appropriation should
fail. Furthermore, the purposes of every appropriation act
since the establishment of the emergency fund, as expressed.
in the title, has been ‘‘for the support of the government
of the state of California’.

We are not without definite judicial pronouncement in
this state of the definition of the term ‘‘contingencies’’, to
meet satisfactorily the case in hand. The meaning of that

352 De 7

term was involved in the case of Verdier v. Roach, 96 Cal.
467 [31 Pac. 554], wherein the court said at page 474:
“There seems to be very little room for controversy as to
the meaning of the adjective ‘contingent’ or the noun
‘contingency’. Webster defines the noun as follows: ‘1. The
quality of being contingent or casual; the possibility of
coming to pass. 2. An event which may occur; a possi-
bility; a casualty’, And defines the adjective ‘contingent’
as follows: ‘1. Possible, or liable, but not certain, to occur;
incidental; casual. 2. Dependent on that which is undeter-
mined or unknown. 8. (Law.) Dependent for effect on
something that may or may not occur.’ The law dictionaries
and the Century Dictionary give substantially the same
definitions. Among those given in the Century Dictionary
are the following: ‘Not existing or occurring through neces-
sity. Dependent upon a foreseen possibility; provisionally
liable to exist, happen, or take effect in the future.’ Indeed,
the word ‘possibility’ is defined (in law) to be ‘a con-
tingency’. (See Webster, Bouvier, Burrill, and Ander-
son.)’? When the word ‘‘contingencies’’? is given the
authorized meaning of ‘‘events which are liable to occur”’,
or events ‘‘provisionally liable to exist, happen, or take
effect in the future’, the term is appropriate to describe
the events contemplated by the statute and by the action
of the director of finance.

In 1929 the definition of emergencies was slightly changed.
‘The word was then defined as follows: ‘‘Emergencies within
the meaning of this provision are hereby defined as con-
tingencies for which no appropriation or insufficient appro-
priation has been made by law.’’ (Stats. 1929, p. 96.)
This same definition was included in the 1931 statute
(Stats. 1931, p. 318), and in the 1933 enactment. (Stats.
1933, p. 814.) The definitions laid down since 1927 did
not have the effect of restricting the application of the
emergency fund. If anything, they had the opposite effect,
namely, to make the emergency fund available by proper
order of the director of finance, to supplement not only
the specific appropriation in the budget enactment, but also
to supplement the appropriations made by law in addition
to the specific appropriations of the budget statute. This
enlargement of the definition would enable the department
of finance to supplement the funds of a so-called self-

Ce 358

supporting department when its funds are depleted and the
transfer from the emergency fund is found necessary, and
thus make the law applicable to the situation presented
in Board of Fish and Game Commissioners v. Riley, supra.

Hl In support of the claim that each department of the
state government must be held to the expenditure in each
fiscal year of not more than one-half of the specific appro-
priation for the department in the budget enactment, it is
argued that if the expenditure of more than one-half be
permitted, a violation of section 677a of the Political Code,
enacted in 1931, will take place. So far as pertinent that
section provides: ‘‘Any officer or employee [of the state]
who incurs any expenditure in excess of the fiscal year
budget, as approved by the department of finance, shall
be liable both personally and on his official bond for the
amount of such expenditures.’’

There are at least two reasons why the foregoing provi-
sions of said section 677a are not violated in the expenditure
by any department of the state of the moneys transferred
to its fund by order of the director of finance and in excess
of the specific budget appropriation. In the first place,
the budget enactment must be considered as a whole.
When so considered we find a specific appropriation for
each department, office and purpose, and likewise a specific
appropriation for emergency fund to be distributed at the
diseretion of the department of finance not only for purposes
not mentioned in the budget enactment but also for the
relief of the several departments, offices and purposes specifi-
cally mentioned but whose appropriations have been found
by the department of finance to be insufficient. When allo-
cation has been made by proper order of the director of
finance the specific budget allowance as thus supplemented
is in law the valid appropriation for such department,
office or purpose, the same to all intents and purposes as
if the sum so transferred from the emergency fund had
been included in the original and specific budget allowance.
In other words, when the transfer is made the department
or officer receiving the supplemental allowance is legally
entitled to expend the original appropriation plus the
additional amount assigned to it by order of the director
of finance. Taken together the sum of the two amounts
is the appropriation authorized by law.

a

854 De |

In the second place every appropriation for emer-
gency fund since 1919, including 1933, has contained the
provision exempting such appropriation from section 4 of
the act. Section 4 of each act covers the same subject
matter but they are not in identical language. Generally
they provide, and the 1933 act specifically provides, that
not more than one-half of the appropriation made shall be ex-
pended during each fiscal year covered by the appropriation
measure. Section 4 of the act of 1933 also provides: ‘‘The ap-
propriations under this act shall, unless otherwise provided,
be subject to the provisions of section 677a of the Political
Code... ’’ Since the appropriation for emergency fund
in 1933 is in terms exempted from the provisions of said
section 677a, it would necessarily follow that allocations
from the emergency fund are not subject to the limitations
of said section, and it would also follow that it was the
intention of the legislature in exempting the use of the
emergency fund from the provisions of said section that
the use of the supplemental allowance by the department
to which it is transferred should not be subject to said
section; for it would be absurd to say that the supplemental
allowance could be made but could not be used for the
purpose intended.

We therefore conclude that the department of fi-
nanee, through its executive officer, has the power to de-
termine, in the exercise of a sound discretion, whether an
emergency exists as contemplated by item 201 of the budget
enactment, and as herein construed, and to order the trans-
fer of money from the emergency fund for a necessary and
proper state purpose when no specific appropriation has
been made therefor, or when a specific appropriation has
been made to a state department, office or purpose and the
same has been found to be insufficient.

‘We come now to a consideration of the specific
orders involved in this proceeding. As to demands (3), (4),
(5) and (6) above enumerated, there can be no doubt that
they fall within the classification of governmental purposes
for which a supplemental allowance may be made on the
record here presented. The emergency and necessity for
the same are set forth in the orders of the director of
finance. Whether the amounts therein specified are too large
or too small does not now present a justiciable question.

ee 365

The determination thereof is left to the sound discretion
of the department of finance and, as stated, the respondent
does not contend that, if the department has the power to
make those allowances from the emergency fund, such
discretion has been abused.

HI As to demand No. (1) a more difficult question is
presented. Item No. 38 in the budget enactment of 1933
is as follows: ‘“‘For support of department of finance, nine
hundred nine thousand eight hundred six and 35/100
dollars; provided that no money hereby appropriated shall
be used for the salary and expenses of chief of the division
of service and supply or bureau of commerce, or bureau
of publication of documents— $909,806.35.’? Considered
alone this appropriation would evidence a specific intention
that no money appropriated by the item be spent for salary
or expenses of the chief of the division of service and sup-
ply; and on the theory upon which we have proceeded, i. e.,
that the appropriation specifically made is subject to aug-
mentation by an allowance from the emergency fund in
proper cases and that the sum of the two amounts is the
amount finally and legally appropriated, it would seem that
the specific appropriation above quoted had effectually cut
off any expenditure of money appropriated by the budget
measure for such salary and expenses. By this prohibition
the following anomalous situation is disclosed: In 1927,
when the department of finance was reorganized (Stats.
1927, p. 449), section 656 of the Political Code was enacted,
which provides: ‘‘For the purpose of administration the
department shall be forthwith organized by the director,
with the approval of the governor, in such manner as shall
be deemed necessary properly to segregate and conduct the
work of the department. .The work of the department is
hereby divided into at least three divisions, to be known
respectively as the division of budgets and accounts, the
division of service and supply and the division of motor
vehicles. . . . The chief of the division of service and supply
shall be appointed by and hold office at the pleasure of the
governor. . The director of finance may also be chief of
the division of budgets and accounts without additional com-
.pensation.”” Under said section effective since 1931, the
chief of each division receives such annual salary as may be
fixed by the director of finance, with the approval of the

356 eee

Governor. (Stats. 1931, p. 843.) By section 663 of the
Political Code as enacted in 1927 and now in effect a board
of control was created to consist of the director of finance,
the chief of the division of service and supply of the depart-
ment of finance, and the state controller, all acting ex officio.
The director of finance is the chairman of the board and
none of the members thereof may receive additional com-
pensation for so acting ex officio as a board of control. By
other sections of the same chapter in the Political Code the
board of control is given extensive executive and adminis-
trative powers. The concurrence of two members is neces-
sary in any decision or determination. In certain matters
the board acts as a board of review over the action of the
controller. The foregoing was the law when the legislature
of 1933 inserted in item 38 of the budget bill the prohibition
against any payment from the appropriations made there-
under for salary and expenses of the chief of division of
service and supply. We are therefore confronted by a
situation wherein a state officer is provided for by statute,
his salary is fixed in the manner prescribed by law, his
service is required in order that one of the most important
departments of the state may function, yet the budget enact-
ment purports to say that his salary and expenses shall not
be paid from any appropriation made for the support of
the department of which he is a constituent member. We
are at a loss to know why this condition of the law was
permitted to stand. It certainly was not designed, for it
cannot be assumed that the legislature would intentionally
create a situation where an officer of the state, whose duties
are necessary to the operation of the state government,
should receive no compensation. It may have been that
bills were introduced in the last legislature looking to a
reorganization of the department of finance and the abolish-
ment of the office of chief of the division of service and
supply and that such bills failed of passage. Be that as
it may, we take the law as we find it, and in doing so we
do not look alone to the form of the words used in the item
of appropriation but to the whole statute and other statutes
as well. (Irelan v. Colgan, 96 Cal. 413 [81 Pac. 294];
Riley v. Johnson, 219 Cal. 518 [27 Pac. (2d) 760].) We
then find an office created and existing which is a necessary
part of the functioning of the department of finance. We

ee 367

further find an officer duly appointed to that office and act-
ing as such, and with compensation for his services fixed
as provided by law. He is a de jure officer and as such
is entitled to compensation for his services as fixed by law.
The question may be asked: From what fund is he to be
paid? Item No. 38 answers the question so far as the gen-
eral appropriation enactment is concerned. And the pro-
hibition therein contained applies also to the emergency fund.
Section 1029 of the Political Code provides: ‘‘Unless other-
wise provided by law the salaries of officers must be paid
out of the general fund in the state treasury, monthly, on
the last day of each month.’’ The time of payment was
changed in 1938 by section 664a of the Political Code (Stats.
1938, p. 40), but section 1029 was not otherwise disturbed.
We do not decide the question whether the salary of the
chief of the division of service and supply should be paid
from the general fund, as that question is not before us.
We refer to section 1029 in passing as indicating that the
legislature has provided for the payment of salaries from
different funds, and item No. 38 has definitely excluded
the payment of the salary of the chief of the division of
service and supply from the budget appropriation and its
emergency fund.

With reference to demand No. 2 the same general statu-
tory situation is disclosed as obtains in connection with the
chief of the division of service and supply. Sections 378
to 878g inclusive of the Political Code, providing for the
establishment and operation of a bureau of commerce, were
continued in effect notwithstanding the prohibition in item
No. 88 of the appropriation measure of 1933. Nevertheless
the prohibition must also be held to have effectively fore-
closed the use of the emergency fund for the Purposes of
that bureau.

From the foregoing discussion it follows that the depart-
ment of finance has exceeded its powers in making executive
orders referred to in demands Nos. (1) and (2) above
enumerated; that as to the executive orders referred to in
demands Nos. (3), (4), (5) and (6) above enumerated,
said department has properly’ exercised its power.

It is therefore ordered that the peremptory writ be
denied as to demands Nos. (1) and (2) and that a peremp-
tory writ of mandate be issued directing the respondent to

358 ee —

audit and approve demands covering items Nos. (3), (4),
(5) and (6) above enumerated.

Thompson, J., Preston, J., and Seawell, J., concurred.

WASTE, ©. J., Dissenting—I concur in the majority
opinion and in the judgment denying issuance of the writ as
to items one (1) and two (2). I dissent from the opinion
and judgment relating to items three (3), four (4), five
(5) and six (6), and ordering issuance of the writ as to
them. .

Petitioner, as director of finance of the state, petitions for
a writ of mandate requiring the respondent, as state con-
troller, to approve certain claims, and, in order that they
may be paid, to augment the specific appropriations made
by the legislature for the support and maintenance of the
departments and activities against which the claims are
made by making transfer of money from the emergency
fund ereated by the general appropriation act. The peti-
tion presents for our consideration the question: Does an
“‘emergency’’ exist within the meaning of the appropriation
act (Stats, 1933, chap. 278, p. 814) creating the ‘‘emergency
fund’’, and which provides (Item 201) as follows: ‘‘For
emergency fund, five hundred thousand dollars, $500,000.00
(exempt from section 4 of this act) to be expended only on
written authorization of the State Department of Finance
for emergencies. Emergencies within the meaning of this
provision are hereby defined as contingencies for which no
appropriation, or insufficient appropriation, has been made
by law.’’?

The respondent, on the advice of the attorney-general, re-
jected the claims on the ground that no such emergency
exists, The claims, six in number, are:

(1) In favor of the chief of the division of service and
supply of the department of finance.

(2) For the support of the bureau of commerce of the
same department.

(3) Support of the Governor’s office—expense of confer-
ence of governors in California.

(4) Division of narcotic enforcement.

(5) Division of water resources, department of public
works.

(6) Department of social welfare,

ee 369

As to the first two, the petitioner, as director of finance,
issued his executive orders, finding as to each that a ‘‘con-
tingency has arisen . . . that no appropriation [italies sup-
plied] has been made by law for the purpose during the
fiscal year’’, and authorizing a sufficient expenditure from
the emergency fund to cover the claims. As to these claims,
I agree with the majority opinion that consideration is
foreclosed by the provisions of the appropriation act (Item
38) providing for the support of the department of finance.
That item reads: ‘‘For support of Department of Finance,
nine hundred nine thousand eight hundred six and 35/100
dollars; provided that no money hereby appropriated shall
be used for salary and expenses of Chief of the Division
of Service and Supply, or Bureau of Commerce, or Bureau
of Publications and Documents———-$909,806.35.’? [Italics
supplied.) I find no other items in the appropriation act
applicable to the chief of the division of service and supply
or to the bureau of commerce.

The ‘‘executive orders’? of petitioner applicable to the
remaining four claims,.and authorizing their payment out
of the emergency fund, recite that ‘‘a contingency has arisen

. in that insufficient appropriation [italies supplied] has
been made by law for expenses, etc... .’’ These recitals
imply, and the provisions of the appropriation act show,
that the legislature, as required by the Constitution (art. IV,
sec. 84), considered the budget bill submitted by the
Governor, and finally enacted it as the appropriation act,
making provision for the usual current expenses of the state
for the biennial period, including the fiscal year in which
acerued the claims here under consideration.

“‘Emergencies’’? which call for demands on the ‘‘emer-
gency fund”’ are defined by the act (supra) ‘‘as contingen-
cies for which no appropriation, or insufficient appropria-
tion, has been made by law.’’ We obtain nd help from the
decisions of other states in considering this provision. The
financial set-up of our own state, under its Constitution and
laws, affords a sufficient answer, in my opinion, to the
efforts of petitioner to supply appropriations in two cases
and to augment appropriations in the other cases. We have
noted the express prohibition by the legislature against the
use, for the first two claims, of any money appropriated.

360 Le |

I cannot agree that it was the intention of the legislature
in enacting the loosely worded definition of an ‘‘emergency’?
to thereby permit an increase out of the ‘‘emergency fund”’
of appropriations made by it for the usual and ordinary
expenses of the regularly constituted departments of state
or state institutions. Neither am I persuaded that, because
in the past transactions similar to those here under review
have been permitted, they were legal. Our own decision in
Heron v. Riley, 209 Cal. 507 [289 Pac. 160], does not
apply here. We were there considering the statute (Stats.
1929, chap. 260) making the state liable for the negligent
operation of its motor vehicles, and authorizing the state
to insure against such liability. The statute was passed
after the budget bill had been enacted. No appropriation
for payment of the necessary insurance premiums was made
in the appropriation act or by subsequent special statutes,
yet it was made the duty of the proper authority to secure
the proper insurance against liability. That was done, and
we had no hesitancy, under the situation there disclosed, in
holding that an ‘‘emergency’’ existed which permitted pay-
ment of the premiums out of the emergency fund.

The alternative writ of mandate heretofore issued should
be discharged, and the petition for a peremptory writ should
be denied in toto,

- I am authorized to state that Mr. Associate Justice Curtis
concurs in this dissenting opinion.

LANGDON, J., Dissenting—I dissent. In addition to
the reasons given by the chief justice in his concurring and
dissenting opinion, I desire to point out that the effect of
the majority opinion is practically to remove the word ‘‘con-
tingencies’’ from the statute under consideration, and to
make the emergency fund available in situations where the
legislature did not intend it to be used. It is obvious that
the words ‘‘emergencies’’ and ‘‘contingencies’”’ are employed
for a purpose, and while it may not be possible or necessary
to lay down a definite, fixed meaning for these terms, it
is nevertheless plain that they imply something that was not
foreseen by the legislature at the time of making the regular
appropriations. In other words, no matter how broadly
they are construed, they cannot comprehend the usual, cur-
rent operating expenses of a department of the government
when the legislature has, with full knowledge of the fune-

Cc ll 361

tions of said department, made a specifie appropriation -
therefor. The words ‘‘insufficient appropriation’”’ cannot be
isolated from the rest of the statutory language, so as to
justify resort to the emergency fund merely because the
regular appropriation has been exhausted, for in such case
the legislative appropriation would have little meaning, and
the requirement of a budget might well be dispensed with.
The ‘‘insufficient appropriation’’ which calls for a tapping
of the emergency fund must be one where the insufficiency
arises from a contingency. Hence, where a department
pursuing its normal and proper functions exceeds its appro-
priation, it has disregarded the legislative mandate, and I
do not believe that the legislature intended that the emer-
gency fund should be used as a convenient method of evasion
of the restrictions of the regular appropriation. Indeed, if
the fund is to be so readily available for normal expenses,
it will in all likelihood be found too depleted to take care of
genuine emergencies.

I am perfectly willing to concede that the question is,
in the first instance, one for petitioner as director of finance;
and some weight is to be given to his conclusion regarding
the existence of an emergency. But while his opinion is
significant in the determination that an emergency exists, it
cannot be conclusive as to what constitutes an emergency.
In other words, his determination of the existence of an
emergency must be tested by the proper meaning of the
term as used in the statute, and under that test, it fails to
justify the order demanded. The record contains nothing
to show that the contemplated expenditures are for purposes
that were not foreseen. The showing made is simply that
the regular appropriation has been exhausted, and that peti-
tioner has concluded that an emergency exists. To grant
relief on such a record is to thwart the clear legislative
intent.

The writ should be discharged and the proceedings dis-
missed.

262

[L. A. No, 13941. In Bank—March 21, 1934.]

TITLE GUARANTEE AND TRUST COMPANY (a Cor-
poration), Respondent, v. FRATERNAL FINANCE
COMPANY (a Corporation), Appellant.

Van Lee Hood and Tudor Gairdner for Appellant.
Robert M. Porter for Respondent.

CURTIS, J—This is an appeal from a judgment based
upon an order striking out the answer of the appellant on

DL

the ground that the same was sham and irrelevant and
granting plaintiff’s motion for judgment on the pleadings.
The action was to foreclose a mortgage given to secure a
promissory note executed by the appellant, the Fraternal
Finance Company, in the sum of $100,000, no part of which
has been paid, except the sum of $5,000. According to
the complaint, the, interest on the promissory note due
February 28, 1932, had not been paid. The complaint was
filed April 18 1932, The answer of the appellant contains
various denials and an affirmative allegation that the plain-
tiff had extended the due date of said promissory note
from August 30, 1931, to August 30, 1934. Respondent
contends that each and every one of the allegations of the
answer is sham and irrelevant and that its motion for
judgment on the pleadings was properly granted. [J Ap-
pellant evidently has abandoned any reliance upon the
denials contained in its answer and rests its case solely upon
the affirmative allegation contained therein as to the exten-
sion of the time of payment of said promissory note. We
make this last statement for the reason that appellant in its
brief makes no attempt to show that any allegation of its
answer, except the affirmative allegation above referred to,
raised a material issue upon which appellant was entitled
to a trial. Appellate courts will notice only those assign-
ments pointed out in the brief of an appellant, all others
are deemed to have been waived'or abandoned. (Mayne v.
San Diego Elec. Ry. Co. 179 Cal. 173, 179 [175 Pac. 690];
Roberts v. Krafts, 141 Cal. 20, 25 [74 Pac. 281]; 2 Cal.
Jur., p. 728.)

Hl As to the affirmative allegation in appellant’s answer
to the effect that the payment of said promissory note had
been extended for a period of three years, the record shows
that the promissory note sued upon contained the usual pro-
vision that ‘‘should default be made in the payment of any
installment of interest when due, then the whole sum of
principal and interest shall become immediately due and
payable at the option of the holder of this note’. In the
complaint it was alleged that ‘‘no interest has been paid
upon said note and mortgage, except interest to August 30,
1981, and that in accordance with the terms thereof interest
is payable semi-annually and a default has occurred in the
semi-annual payment due February 28, 1932’, It will thus

364 De |

be seen that even if the due date of said promissory note
had been extended as claimed by appellant from August 30,
1931, to August 30, 1934, still the appellant was in default -
in the payment of the semi-annual installment of interest due
February 28, 1932. Respondent, therefore, was entitled
to institute foreclosure proceedings upon said note and
mortgage immediately after said default in the payment of
said interest installment, and this would be so even if the
maturity of said note had been extended to August 30, 1934,
The allegation therefore of the answer as to the extension
of the time of payment of the principal of said note was of
an immaterial fact and presented no defense whatever to the
action of foreclosure. The allegation was clearly irrelevant.
HI While there is no allegation in the complaint that plain-
tiff exercised its option to declare the principal sum of said
promissory note due and payable, such allegation was not
necessary. It has been repeatedly held that the commence-
ment of the action itself is sufficient to show the exercise of
such option. (Williams v. Gordon, 205 Cal. 590, 592 [271
Pae. 1070].) :

We are therefore of the opinion that the answer raised no
material issue upon which appellant was entitled to a trial
and that the order of the trial court granting respondent’s
motion for judgment on the pleadings was properly granted,

The judgment is affirmed.

Preston, J., Shenk, J., Waste, C. J., Seawell, J., and Lang-
don, J., concurred.

[L. A. No. 13637, In Bank—March 22, 1934.]

. H. 8. STILLWELL et al., Appellants, v. ANN G. JACK-
SON et al., Respondents,

a6
SS

Butcher & Haines, Norris Montgomery, J. F. Goux and
Schauer, Ryon & Goux for Appellants.

T. W. Haymond and Heaney, Price & Postel for Re-
spondents.

WASTE, C. JJ Motion to dismiss the appeal or
affirm the judgment (the third directed to the same point),
made by respondents, on the ground that the appellants have
not met the requirements of section 958¢ of the Code of
Civil Procedure, which requires the parties to an appeal to
“print in their briefs, or in a supplement thereto, such
portions of the record as they desire to call to the attention
of: the court’’, In response to the first motion, the appel-
lants filed a supplemental brief, setting out the substance of
the pleadings, the findings of fact and conclusions of law,
and the decree, parenthetically referring to the line and
page of the typewritten clerk’s record. As to that record,
therefore, there is a sufficient compliance with the section.
(Supreme Court Rule VIII.)

HJ The action is one brought by several plaintiffs
against a large number of defendants to quiet title to land
fronting on the ocean in Santa Barbara County. The

LL

exhibits, and the evidence of the very large number of wit-
nesses, relate back to patent from the United States govern-
ment issued in 1872. The reporter’s transcript consists
of four volumes aggregating nearly twenty-two hundred
pages of testimony and one volume containing one hundred
and sixty-one exhibits. While the appellants, in their open-
ing brief and supplement, have only printed or referred to
what appears to be an almost inconsiderable part of the
record of the testimony, and have referred to but a few of
the exhihits, we yet find nothing tending to rebut the
apparent good faith of appellants in presenting their
record on appeal. We must assume that appellants have
presented all the parts of the record and of the evi-
dence they desire to call to the attention of the court. If
other parts of the record and transcript rebut or destroy
the showing made by the appellants, it is the duty of the
respondents to, and they no doubt will, print such portions.

The motion to dismiss the appeal is denied. Respondents
may, within the usual time, dating from this order, file
their brief on the merits, the appellants to file closing brief,
also in regular time, the cause to then take the regular course
on the calendar.

Shenk, J., Thompson, J., Curtis, J., and Preston, J., con-
curred.

[L. A. No. 14461. In Bank.—March 26, 1934.]

W. H. SPINKS, Respondent, vy. THE CITY OF LOS AN-
GELES (a Municipal Corporation) et al., Appellants.

SHAILOR C. DODGE, Respondent, v. THE CITY OF LOS
ANGELES (a Municipal Corporation) et al., Appel-
Jants.

Gibson, Dunn & Crutcher and Woodward M. Taylor for
Appellant Griffith Co.

: Ray L. Chesebro, City Attorney, Frederick Von Schrader,
Assistant City Attorney, and Arthur Loveland and Robert
J. Stahl, Deputies City Attorney, for all other Appellants.

O'Melveny, Tuller & Myers, John A. Powell and Louis W.
Myers as Amici Curiae on Behalf of Appellant.

Ray ©. Eberhard, Henry P. Leavitt, George Winfield
Scott, Scott & Hberhard and L. H. Valentine for Respond-
ents.

WASTE, OC. J The logal question presented by this
appeal is: May a municipality, which is the owner in fee of
land acquired without restrictions, and set aside for park
purposes, devote a portion of the land to public use as a
street? Certain findings of the trial court, relating to an
opposition to such action by taxpayers and abutting prop-
erty owners affected by the proposed change of use, have no
bearing on the issue presented in this case for our considera-
tion, and may be disregarded in this discussion.

The city of Los Angeles, as the successor of the Mexican
pueblo of the same name, is the owner in fee of land within

3

the corporate limits of the city which for many years has
been set apart for and used as a park, known as West Lake
Park. A freeholders’ charter, adopted by the electors of
the city in 1888, and approved by the legislature, provided
(sec. 113): ‘‘ All lands and real property located in the City
of Los Angeles, which have been heretofore, or which may
be hereafter, set apart or dedicated for the use of the public
as a public park or parks, shall forever remain to the use
of the public as such park or parks, inviolate and no part
of said lands or real property shall ever be used or occupied
for any other purpose.”? This provision was later amended,
and became section 119b, which read: ‘‘All lands belonging
to the city which have heretofore or which hereafter may be
set apart or dedicated for the use of the publie as a public
park, shall forever remain to the use of the public inviolate;
provided, however, that the Board of Park Commissioners
may, with the approval of the Council, given by ordinance
«+. authorize the opening, establishment and maintenance
of streets or other public ways in or through such parks;

. ” [Italies supplied:] (Stats. 1917, p. 1686.) Twice
since the adoption of section 119b it has been amended in
matters not here material, and is now section 178 of article
XVI of the charter of the city.

Proceedings were initiated by the city council and the
board of park commissioners for the extension of Wilshire
Boulevard, in part approximately across the center of West
Lake Park, as part of the major traffic street system of the
city. A contract for the extension and construction of the
street was entered into when the plaintiffs brought these
actions to perpetually enjoin and restrain the construction
of the street across the park. Judgment was entered for
the plaintiffs, and the defendants have appealed. The fore-
going are the facts, and only the one question of law hereto-
fore stated is presented.

Where a tract of land is donated to a city with a restric-
tion upon its use—as, for instance, when it is donated or
dedicated solely for a park—the city cannot legally divert
the use of such property to purposes inconsistent with the
terms of the grant. A less strict construction is adopted as
to dedications made by the public. (Slavich v. Hamilton,
201 Cal. 299, 303 [257 Pac. 60].) The case here is not one
of the type first referred to, in which a donor transfers
property to a municipality for a fixed and definite purpose

re 369

defined in the grant, and where the rule of strict construc-
tion is to be applied. Acting under authority of its charter,
and through the action of its legislative body, the city is
only dedicating its own property to a different public use
than that to which it has been heretofore subjected.

HM The right of a municipality to meet changing con-
ditions in its development cannot be denied, even though
in so doing it imposes burdensome restrictions upon private
property. Miller v. Board of Public Works, 195 Cal. 477
[284 Pace, 381, 38 A. L. R. 1479], and Jardine v. City of
Pasadena, 199 Cal, 64 [248 Pac, 225, 48 A. L. R. 509], are
leading cases in this state on that subject. The authorities
establish, also, that an abutting owner has no special right
or interest which entitles him to insist upon the continued
use of public property for the purpose to which it has been
dedicated. (Reichelderfer v. Quinn, 287 U. 8. 815 [53 Sup.
Ct. 177, 77 L. Ed. 331] ; Polack v. Trustees, etc., 48 Cal. 490;
Seattle Land Imp. Co. v. City of Seattle, 837 Wash. 274 [79
Pae. 780].) The Reichelderfer case, supra, is particularly
pertinent here, because it involved the effort of an owner of
land abutting on a park to enjoin the erection of a publicly
owned structure in the park. It was squarely held in that
ease that as it acquired the fee to the park lands, as did
the city in this case, the government, by dedicating the lands
to a particular use, did not purport to deprive itself of the
power to change that use and devote the lands to other pur-
poses, and the abutting owner cannot complain if that be
done.

There being uo dispute on the material facts, the judg-
ment is reversed and the cause is remanded to the lower
court with the direction that it enter judgment for the
defendants.

Shenk, J., Thompson, J., Curtis, J., Langdon, J., Preston,
J., and Seawell, J., concurred.

Rehearing denied.
a

370 es 7

(. A, No, 14482. In Bank,—March 27, 1934,]

In the Matter of the Estate of GEORGE H. PATTERSON,
Deceased. KATE R. RYAN et al. Appellants, v.
DAISY RUTH RENOBE et al., Respondents.

Joseph Scott, A. G. Ritter, Leo B. Ward and Theodore C.
Heyl for Appellants.

Megerve, Mumper, Hughes & Robertson and Timon HE.
Owens for Respondents.

THE COURT.—This is a motion to dismiss an appeal
from an order nonsuiting the appellants in a contest of will
before probate. The proponents of the will contend that the
order is nonappealable in that it is not designated in section
1240 of the Probate Code as one of the probate orders from
which an appeal will lie. In opposition thereto the con-
testants urge that a will contest is ‘‘primarily in the nature
of a civil action’? and that ‘‘such a contest is so pre-
dominantly civil that it comes within the category of cases
for which the legislature intended to provide a right of

ee srt

appeal by subdivision 1 of section 963 of the Code of Civil
Procedure”’.

HI While a will contest possesses some of the attributes
of a civil suit, it is characteristically and essentially a pro-
bate proceeding. An order sustaining a demurrer without
leave to amend to a contest before probate, not being desig-
nated in subdivision 3 of section 963 of the Code of Civil
Procedure, the predecessor of the present section 1240 of
the Probate Code, was held to be nonappealable in Estate
of Stierlen, 199 Cal. 140, 142 [248 Pac. 509]. To the same
effect, see Estate of Rawson, 66 Cal. App. 144, 145 [225
Pac. 474]. In Estate of Edelman, 148 Cal. 288, 235 [82
Pac. 962, 113 Am. St. Rep. 281], trial was had on the
issues presented in a contest before probate and an order
was made dismissing the contest. The order was held to be
nonappealable and a purported appeal therefrom dismissed.

In each of the cited cases it was held that the only ap-
pealable orders in probate matters were those designated in
subdivision 3 of section 963 of the Code of Civil Procedure
and that inasmuch as-the respective orders appealed from
were not so designated, they constituted mere intermediate
rulings or orders which were reviewable only upon appeal
from the final order or judgment admitting the will to
probate. °

HI This reasoning is applicable to the present inquiry.
No provision is made in section 1240 of the Probate Code,
the successor to subdivision 3 of section 963, supra, for an
appeal from any order affecting or determining a contest
before probate. This being so, such intermediate order is
reviewable only upon appeal from an order admitting the
will to probate.

The present appeal must be, and it is hereby, dismissed.

212

[L. A. No, 14415, In Bank.—March 27, 1934.]

SECURITY TRUST & SAVINGS BANK OF SAN DIEGO
(a Corporation), Respondent, v. NEW YORK IN-
DEMNITY COMPANY (a Corporation), Appellant.

Mathes & Sheppard, W. ©. Mathes, Lloyd Melvin Smith
and J. Stanley Mullin for Appellant.

SE :

O'Melveny, Tuller & Myers, Louis W. Myers, C. P. Von
Herzen, Joe Crider, Jr., and Clarence B. Runkle as Amici
Curiae on Behalf of Appellant.

Hamilton, Lindley & Higgins for Respondent.

WASTE, C. J.—Defendant appeals from a money judg-
ment entered in favor of plaintiff.

The cause went to trial on an agreed statement of facts
which may be summarized as follows: At all times material
to this action Gordon L. Eby and Lewis H. Homer were
attorneys-in-fact for the Indemnity Insurance Company of
North America, which for brevity we will refer to as the
Indemnity Company, and each was authorized to execute,
acknowledge and deliver in the name of the company, in-
demnity and fidelity bonds and undertakings, including those
similar to the one here involved. Homer had offices with and
was employed by Eby. He acted as solicitor and salesman
for the Indemnity Company and inspected and supervised.
the work of contractors for whom the Indemnity Company
had written indemnity or fidelity bonds and represented the
Indemnity Company in cases where such contractors had
failed or were about to fail or had abandoned the perform-
ance of their contracts. These facts were all known to the
plaintiff bank and its officers.

P. C. Kelley was a vice-president of the plaintiff bank and
was authorized to and did act for it in all the transactions
involved in this action. R. W. Forsyth was the Pacifie Coast
manager of the Indemnity Company. Blanche P. Matson
was a notary public in and for San Diego County and was
employed in the office of Eby up to about November 17,
1928, on which date her employment terminated. Plaintiff
and its officers knew she was a notary public and that she
was employed in the office of Eby, but had no knowledge
of the termination of her employment until after March 4,
1929,

On or about December 24, 1928, Homer represented to
Kelley that a contractor named R. T. Dawson had obtained
two public improvement contracts, one known as the Sweet-
water bridge contract and the other as the Dulzura conduit
contract, with the Indemnity Company as surety on his
labor, material and completion bonds; that Dawson was

1

unable to complete the contracts and that the Indemnity
Company would be compelled to take over and complete
them at a cost to it of $15,000; that the completion would
require about six months; that the Indemnity Company had
instructed Homer to take charge of the completion work and
to borrow money in his own name from the plaintiff to
complete the contracts; that the Indemnity Company would
guarantee the repayment of the loan by giving a bond in
the penal sum of $16,500. Homer gave Kelley an un-
. executed bond which would serve as the form of the bond
to be executed to secure this loan. This application for a
loan was referred to the loan committee of the plaintiff
bank. Kelley reported the representations made to him by
Homer and gave the committee the blank form of bond.
While the application was under consideration by the loan
committee, and for the purpose of inducing it to approve the
loan, Homer presented to plaintiff the following letter:
“Gordon L. Eby & Co.,

“Gentlemen :

“Re: Robert T. Dawson
§. A. 15148 Sweetwater Bridge.
S. A. 14195 Dulzura Conduit.

“Your wire received. You are hereby authorized to sign
Indemnity Bond $16500.00 favor of Security Trust & Sav-
ings Bank of San Diego securing note of Lewis H. Homer
issued for six months.

“Very truly yours,
“R. W. Forsyra,
“R, W. Forsyrs.

“RWE/AM Manager.”’

Homer represented to the officers of the plaintiff bank that
the foregoing letter was genuine and bore the genuine
signature of R. W. Forsyth. The loan committce and officers
of plaintiff bank believed Homer’s representations and au-
thorized the making of the proposed loan, which was to be
evidenced by the promissory note of Homer, due in six
months and secured by the written guarantee of the In-
demnity Company.

Thereafter and on or about December 27, 1928, Homer
executed and delivered to plaintiff the required promissory
note in the principal sum of $15,000 and the written guar-
antee purporting to have been executed by the Indemnity

SS

Company and having attached to it the signature of the
Indemnity Company by Gordon L. Eby, its attorney-in-fact.
This guarantee bore the acknowledgment of Eby before
Blanche P. Matson, a notary public. Homer represented
‘that the guarantee bore the genuine signature of Eby and
was in fact duly acknowledged by him. Plaintiff and its
officers did not question the truth of these representations,
made the loan upon the security mentioned, and placed
$15,000 to the credit of Lewis H. Homer in a checking ac-
count subject to his check. All of this money was with-
drawn by checks signed by Homer prior to March 1, 1929,
except the sum of $28.49. Homer disappeared on this last
date and has not been apprehended.

It is stipulated that plaintiff would not have advanced the
money to Homer had it not believed all the representations
made by him and that the letter arid guarantee were the
genuine acts of Forsyth and the Indemnity Company.

All the representations made by Homer were false and
fraudulent except that there was a contractor named R. T.
Dawson who had two contracts for public improvements
which we have mentioned; that the Indemnity Company had
written a labor, material and completion bond for him, and
that the signature and seal of Blanche P. Matson on the
certificate of acknowledgment were genuine. The signature
of Forsyth on the letter was forged, as was the signature
“Indemnity Company of North America by Gordon L. Eby,
attorney in fact’? on the guarantee. The signature of
Blanche P. Matson on the certificate of acknowledgment was
her genuine signature. It had been attached to the certifi-
cate in blank before it was attached to the indemnity guar-
antee bond. It was her custom to sign acknowledgment
certificates in blank for convenience. These were left in
her desk in the office of Eby. The certificate of acknowledg-
ment was filled out by Homer or some other person without
her knowledge or consent and the notarial seal attached after
she left Eby’s office was attached to the guarantee bond
by Homer before its delivery to the plaintiff. (Security
Trust & Sav. Bank v, Matson, 116 Cal. App. 616 [2 Pac.
(2d) 1001].) Neither Forsyth, Eby nor the Indemnity
Company had any knowledge of the execution and delivery
of the forged letter or of the forged guarantee bond, and
neither plaintiff nor its officers had any knowledge of these

10 rr

forgeries or of the falseness of the representations made
by Homer until after March 1, 1929.

Upon ascertaining the facts the plaintiff bank made writ-
ten demand upon the defendant New York Indemnity Com-
pany for the loss sustained as a result of the loan to
Homer, and accompanied the demand with an affidavit pur-
porting to comprise a proof of loss under the terms and
provisions of a ‘‘Banker’s Blanket Bond’’ theretofore -
issued by the defendant to the plaintiff upon payment of
the premium therefor. The defendant denied any liabil-
ity for the loss and this action followed. As already in-
dicated, the trial court gave judgment for the plaintiff.
The sole question presented is whether the loss to the
plaintiff bank, as a result of the transaction with Homer,
is such a loss as the defendant Indemnity Company insured
against by the terms of its ‘“‘Banker’s Blanket Bond”’.

The pertinent coverage provisions of the bond are:

“The losses covered by this bond are as follows:...

“*(B) Any loss of Property through robbery, larceny
(whether common-law or statutory), burglary, theft...
while the Property is within any of the Insured’s offices
covered hereunder, ...

“The foregoing agreement is subject to the following con-
ditions and limitations: . . .

“Section 2, This bond does not cover:

“(a) Any loss effected directly or indirectly by means
of forgery, except when covered by Insuring Clause (A)
or (D) hereof. [It is conceded that insuring clauses ‘‘A’”’
and ‘‘D” are without application to this case]...

“(d) Any loss resulting from any loan made by the In-
sured... 7?

It must be admitted that Homer’s conduct in ob-
taining the loan from the plaintiff bank and in absconding
with the money so obtained constituted theft as it is now
defined in section 484 of the Penal Code. Every element
of the offense is presented in the facts stipulated to by the
parties.

Hy This being so, and had the bond contained only the
jnsuring clause ““B’’, without exception or limitation, the
loss suffered by plaintiff would fall squarely within its cov-
erage provisions and the judgment would have to be af-
firmed. However, the several coverage clauses are, in the

SS

terms of the bond, “‘subject to the following conditions and
limitations’’, viz. that the bond does not cover (a) any
loss effected directly or indirectly by means of forgery, or
(d) any loss resulting from any loan made by the insured.
A mere reading of the stipulated facts, summarized above,
very clearly indicates to us, and the trial court so found,
that the loss suffered by the plaintiff bank was effected, in-
directly at least, by means of forgery. This, of course, serves
to exclude such loss from coverage under the policy because
of the exception and limitation contained in section 2a,
above quoted. The loss suffered in the Homer trans-
action would also appear to be excluded from coverage
under the policy because of the provisions of section 2d,
supra, which exclude any loss resulting from a ‘‘loan’’.
For either or both of these reasons the judgment must be
reversed.

| | In opposition to this conclusion and in support of
the judgment, the plaintiff contends that the court below
was correct in determining an inconsistency existed in the
coverage clauses of the policy which, under settled prin-
ciples, should be resolved in favor of the insured. While
we readily recognize and approve the principle that am-
biguities and inconsistencies should be resolved against the
insurer and in favor of the insured, we fail to see its appli-
eation to the bond under consideration. We are unable to
subscribe to the reasoning which suggests that because the
general coverage clause ‘‘B’’ insures against all thefts, the
exception or limitation clauses excluding losses resulting
from forgery or growing out of a loan, must be so con-
strued as to exclude such losses only when there is an
absence of the elements of theft. To so interpret the bond
would be novel, to say the least, and would serve to nullify
the exception or limitation clauses in important particulars.
The very purpose of exception or limitation clauses is to
exclude risks otherwise covered by general coverage clauses.
It is of their nature to conflict with general clauses in that
they constitute restrictions on the latter. An insurance
contract, like any other contract, should be construed as an
entirety, the intention being gathered from the whole in-
strument. (Burr v. Western States L. Ins, Co., 211 Cal.
568, 576 [296 Pac. 273].)

1S

The unquestionable purport of section 2a is that the bond
does not cover ‘‘any loss effected directly or indirectly by
means of forgery’’, unless such loss falls within the pur-
view of the general covering clauses ‘‘A’’ or ““D’’, which
latter clauses, as stated above, are not pertinent to the
present inquiry. If all losses effected by means of forgery,
except losses covered by clauses ‘‘A’’ and ‘“‘D’’, are ex-
cluded from coverage under the bond, it goes without say-
ing that losses otherwise covered by the general clauses
“*B” and ‘‘C”’ are excluded when effected directly or in-
directly by means of forgery. What has been said applies
equally to losses resulting from loans. (Sec. 2d, supra.)

This construction of the bond comports with the provi-
sions of section 2628 of the Civil Code wherein it is de-
elared that ‘‘Where a peril is specially excepted in a con-
tract of insurance, a loss, which would not have occurred
but for such peril, is thereby excepted; although the im-
mediate cause of the loss was a peril which was not ex-
cepted.”

We find additional support for our conclusion in two
New York decisions wherein the identical question was
presented for adjudication. (Trade Bank of WN. Y. v.
United States F. & G. Co, 249 N. Y. 546 [164 N. E.
578]; World Exch. Bank v. Commercial Cas. Ins. Co., 255
N. Y. 1 [173 N. B. 902, 904].) In each of these cases the
New York court was called upon to interpret a ‘‘Banker’s
Blanket Bond’’, such as we have here before us, and more
particularly to determine the identical question here in-
volved, viz., whether losses resulting from theft, and other-
wise covered by the general insuring clause ‘‘B’’, are ex-
eluded from coverage because of the particular provisions
of section 2a excluding any loss effected directly or in-
directly by means of forgery. In each of the cited cases
the loss was held, as herein concluded, not to be covered
by the bond. The following appears in the latter case:
“Subdivision B gives indemnity for any loss ‘through rob-
bery, ... theft, ... while the property is actually within
the offices of the insured’. This clause might apply to the
Joss suffered by the plaintiff if it were not for a subsequent
exception. By subdivision 2 (a), the ‘bond does not cover
any loss effected by means of forgery, except when covered
by insuring clauses A and D’. The loss in question was
one effected by means of forgery ... and, unless covered

SSC 379

by A or D, must be held to be excluded.’’? This construc-
tion of the provisions of the bond coincides with our inter-
pretation thereof.

Inasmuch as this cause was submitted to the court below
upon an agreed statement of fact, and there is therefore
no necessity for a second trial, the judgment is reversed
with directions to the trial court to make new findings of
fact and conclusions of law in accordance with the views
herein expressed and to enter judgment thereon for the
defendant.

Curtis, J., Langdon, J., Preston, J., Shenk, J., and
Thompson, J., concurred.

Rehearing denied.
as

[L. A. No. 14521. In Bank—March 27, 1934.]

THOMAS STANLEY EDWARDS et al., Appellants, v.
JOHN JOSEPH MULLIN, Respondent.

380 Pe 7

Gavin McNab, Schmulowitz, Wyman, Aikins & Brune,
Nat Schmulowitz, George B. Harris, Loyd Wright and
Charles E. Millikan for Appellants.

Finlayson, Bennett & Morrow and Henry L. Knoop for
Respondent.

PRESTON, J.—The determination of this appeal rests
upon our consideration of the main issue presented, to wit:
‘Whether covenants in restraint of trade, contained in the
contract which forms the basis of this action, render said
contract illegal and void, in whole or in part, under sections
1678, 1674 and 1675 of the Civil Code,

Section 1678, swpra, declares that ‘‘Every contract by
which anyone is restrained from exercising a lawful profes-
sion, trade, or business of any kind... is to that extent
void.’’ Section 1675 makes an exception in favor of part-
nership arrangements, declaring that partners may, in an-
ticipation of dissolution of the partnership, ‘‘agree that none
of them will carry on a similar business within the same
city or town where the partnership business has been trans-
acted, or within a specified part thereof’’,

On April 15, 1927, the parties to this action executed a
written agreement for dissolution of their copartnership.
The agreement recited that they had engaged ‘“‘in the
tourist brokerage business in the state of California’’, con-
ducting an office in San Francisco and one in Los Angeles,
and that they owned certain agency rights and agreements
with Franco-Belgique Tours Company, Ltd., and other or-
ganizations. Said contract then set a time and place for
final accounting and adjustment, and liquidation of the
partnership affairs. Thereupon it provided for assignment
by defendant to plaintiffs of all his aforesaid rights or
agreements ‘‘in and for that territory in the northern por-
tion of the state of California generally designated as the San
Francisco territory, commencing immediately north of Bakers-
field, Kern Oounty, California, and extending northerly to
the northernmost border of said state, together with all
business and goodwill of said copartnership in the said
above-named territory, including said office of said copart-
nership, with all its furniture, furnishings, fixtures and

ee 381

equipment, located at No. 582 Market street, San Francisco,
California.’’ Plaintiffs made a similar assignment to defend-
ant covering all that ‘‘territory in the southern part of the
state of California generally designated as the Los Angeles
territory’, from and including Bakersfield to the southern-
most border of the state, together with the business and
goodwill of the copartnership in said territory, including
the office, ete., at 756 South Broadway, Los Angeles. Having
thus divided their properties, the parties each covenanted to
refrain from injuring one another or engaging in a like busi-
ness in the other’s territory for a period of twenty-five years,

Plaintiffs brought this action to recover damages in
the sum of $14,000, caused by defendant’s alleged breach of
said contract in soliciting and accepting, through said
Franco-Belgique Tours Co., Lid., business originating in
the city and county of San Francisco. Defendant objected
to the introduction of any evidence under plaintiffs’ second
amended complaint on the ground that it failed to state a
cause of action, in that said contract was void, being viola-
tive of said sections 1673, 1674 and 1675 of the Civil Code.
The court below sustained the objection and entered judg-
ment for defendant. Plaintiffs appealed.

It is apparent that the area embraced within the respec-
tive covenants of the contract exceeds the territorial limits
prescribed by said sections of the Civil Code. Appellants
claim that the territory designated is divisible, so that said
agreement may be upheld in so far as it applies to the city
and county of San Francisco, even conceding its invalidity
as to the remaining portion of the so-called ‘‘San Francisco
territory’’. Respondent urges that the parties were en-
gaged in a business state-wide in scope, evidenced by the
language of the contract and the known character of a tour-
ist brokerage business, of which the court will take judicial
notice, and that these facts render the entire agreement
indivisible, illegal and void. To state respondent’s position
in his own language: ‘‘Since the parties expressly cove-
nanted with respect to entire areas, each of which greatly
exceeds the limits permitted by statute, and with respect
to a business that was' conducted throughout those areas, the
court cannot sever either area, and consequently each cove-
nant is unenforceable in its entirety. To enforce either as
to any portion of the area to which it relates would be to

382 ee =

make a new contract for the parties and this the courts can-
not do... The covenants are mutual and one constitutes
the consideration for the other. Since the consideration for
each is in part unlawful, both covenants are entirely void.’’

Appellants call our attention to the declaration of the
statute (sec. 1673), that a contract which restrains trade is
only ‘‘to that extent void’’; containing no element of moral
turpitude, it is not malum in se, as distinguished from that
which is merely proscribed by statute, malum prohibitum.
Appellants also urge that we should have no difficulty in
construing this contract as divisible, for the partnership
maintained an office and transacted business at No. 582
Market Street, in the city and county of San Francisco, the
boundaries of which city are definite and certain, and the
area within the restriction imposed upon the remainder of
the so-called ‘‘San Francisco territory’’ is capable of ascer-
tainment and segregation. Furthermore, to so construe the
contract as to perhaps permit defendant to profit from his
alleged deliberate violation of his covenant would not pro-
mote fair dealing and the ends of justice.

We agree with appellants that the rule of severability
may be here invoked to uphold the validity of that portion
of said contract not violative of statute. Further discussion
or review of the numerous authorities cited an both sides
would not clarify this pronouncement. We recognize that
the question is a close one and one upon which the author-
ities have long been divided. The effect of earlier decisions
was to uphold part of a covenant of this character only
when it appeared in divisible form. Later cases, however,
even viewed in the light of respondent’s effort to distin-
guish them, have gone far in the other direction and indeed
the courts will now “‘strain to put such a construction upon
the covenant so as to save it in part’’ (Stanley Co. v. Lago-
marsino, 58 Fed. (2d) 112, 115). We therefore choose in
this cause to state the holding which promises to promote
justice and which conforms to the trend of modern authority
as indicated by recent decisions wherein will be found a
review of this subject, digest of earlier rulings and full
citation of authority. See Stanley Co. v. Lagomarsino,
supra, and General Paint Corp. v. Seymowr, 124 Cal. App.
611 [12 Pac. (2a) 990].

SS 3:

The judgment is reversed with directions to the court
below to proceed with trial of the cause.

Curtis, J., Thompson, J., Shenk, J., Seawell, J., and
Waste, C. J., concurred.

{L. A. No, 13967. In Bank—March 27, 1984.]

BANK OF AMERICA NATIONAL TRUST AND SAV-
INGS ASSOCIATION, as Executor, etc. et al., Re-
spondents, v. HARRISCOLOR FILMS, INC. (a New
Jersey Corporation) et al., Appellants.

2°
eS

Victor F. Collins for Appellants,

Raphael Dechter, Goudge, Robinson & Hughes and David
A. Sondel for Respondents.

SEAWELL, J—This is an appeal by the defendants from
a judgment foreclosing a mortgage on real property.

It is first urged that the trial court erred in denying
defendants’ motion for a continuance of the trial. This
motion was supported by an affidavit of defendants’ counsel
to the effect that the principal office of the defendant cor-
poration was in the city of Newark, New Jersey, and that
the president of the corporation, who alone was asserted to
be familiar with the facts involved in this litigation and
whose presence was averred to be essential to a proper de-
fense of the action, had left the state upon the advice of
counsel that the cause would not be reached for trial until
approximately July, 1932,

Inspection of the record discloses that the complaint was
filed July, 16, 1931. The corporation defendant filed its
original answer on August 27, 1931, and its amended an-
swer on September 28, 1931. The individual defendants,
who were joined merely for the purpose of foreclosing any
interest they might have in the mortgaged property and not
as debtors on the principal obligation, which was purely a
corporate debt, filed their answer on February 10, 1932.
Thereafter and on March 5, 1982, counsel for the plaintiffs
filed an affidavit and notice of motion for ‘‘short cause
setting’, The motion to set was made on March 11, 1982,
at which time the cause was set down for trial on April 22,
1932. On April 8, 1932, two weeks prior to the time set for
izial, counsel for the defendants filed the affidavit above re-
ferred to requesting a continuance until July or August,
1932.

A motion for continuance is, of course, addressed to
the sound diseretion of the trial court and, in the absence of
a clear showing of abuse in the exercise thereof, an appellate
court will not disturb the ruling thereon. We find no abuse
of discretion in the present case. It was not unreasonable

CE

to require the defendants to be ready for trial approximately
two and one-half months after the filing of the last answer
and the bringing of the cause to issue. Moreover, the affi-
davit filed in support of the motion merely refers to the ab-
sence of the corporate officers and makes no attempt to aver
or establish physical or financial inability to be present at the
trial.

At the time set for trial the defendants, through counsel,
renewed the motion for a continuance. The request was
again denied, whereupon the defendants declined to’ offer
any evidence in opposition to plaintiffs’ showing. Judg-
mént followed for the plaintiffs. [J Defendants contend
that plaintiffs’ evidence is insufficient to show ownership in
them of the note and mortgage. The contention lacks merit.
‘We have examined the transcript and find that the evidence,
both oral and documentary, definitely establishes plaintiffs’
ownership in these instruments in the respective undivided
shares or interests claimed by them in the complaint and
approved by the court in its findings.

HI lt is fmally urged that the court below erred in
striking out an affirmative defense of the corporate defend-
ant, wherein it was alleged, in substance, that the mortgage
sought to be foreclosed had been executed by the defendant
corporation as a purchase-money mortgage in consideration
for which the mortgagee agreed and undertook to transfer
to the mortgagor an exclusive license in and to the use of
certain inventions and patents; that it was subsequently
decreed and adjudged in an action between the parties
thereto or their representatives that the corporate defend-
ant (mortgagor) in consideration of the execution and
delivery of said note and mortgage ‘‘had lawfully acquired
an exclusive license’’ in and to the use of said inventions
and patents; that said judgment is now final; that the
defendant corporation, as mortgagor, had since ascertained
that the mortgagee perpetrated a fraud upon it and by rea-
son of prior transfers to third persons was unable to and
in fact failed to transfer to it an exclusive license to use
said inventions and patents; and that this evidence of fraud
was unavailable to it at the time of the entry of the judg-
ment referred to which undertook to and did adjudicate the
respective rights of the parties. In support of this affirma-
tive defense the defendants now urge that the prior suit and

a

386 ee =

judgment proceeded upon the theory or assumption that the
mortgagee had transferred such exclusive license to the
mortgagor and that the issue was neither presented nor ad-
judicated therein. In view of defendants’ allegation and
concession that the judgment, now final, entered in the prior
action decreed that the corporate defendant herein, in con-
sideration of the execution of the note and mortgage here
sued on ‘‘had lawfully acquired an exclusive license’’ in and
to the use of the inventions and patents covered by the agree-
ment, it is immediately apparent that the affirmative defense
and the argument here made in support thereof constitute, at
best, a collateral attack upon a final judgment, valid upon
its face. This being so, it was proper for the court below to
strike out such abortive affirmative defense. Assuming the
facts to be as alleged in the stricken defense, there are other
and sufficient remedies available to the mortgagor.

‘What has been said sufficiently disposes of defendants’
further contention that it was error for the trial court to
subsequently refuse to allow the filing of an amended an-
swer intended to reinstate this defense.

The judgment is affirmed.

Thompson, J., Shenk, J., Curtis, J., Preston, J., and
Waste, C. J., concurred.

[Grim, No. 3627, In Bank—March 28, 1934,]

THE PEOPLE, Respondent, v. ARTHUR SHORTEN,
Appellant.

i | 387

Frederic H. Vereoe, Public Defender, for Appellant.

U. 8. Webb, Attorney-General, Frank Richards, Deputy
Attorney-General, Buron Fitts, District Attorney, and Tracy
Chatfield Becker, Deputy District Attorney, for Respondent.

SHENK, J.—The defendant was prosecuted for the
murder of his wife, Sally Shorten. From a judgment im-
posing the death penalty and from an order denying his
motion for a new trial the defendant appeals,

The defendant and his wife, the deceased, with two chil-
dren, formerly resided at Port Arthur, Texas. The wife
with the children removed to Los Angeles in August, 1931.
The defendant followed them in December of the same year,
and resided with his family on 114th Street in that city.

John Finney, a brother of the deceased, was an eye-wit-
ness to the tragedy and testified at length for the prosecu-
tion. In April, 1932, Finney was living with his family also
on 114th Street and opposite the place of residence of the
defendant. Finney’s family included his wife and four
small children, one of whom was a baby ten days old. Mrs.
Finney and another child were ill and the deceased was
temporarily residing with them and assisting in the care of
the mother, the babe, and the sick child.

On the evening of April 25, 1932, the defendant went to
the Finney house and requested his wife to come to her own
house for the night, and she refused to comply with the
defendant’s request. She retired for the night before the
defendant, about midnight, left for his own home, taking
one of his children, a boy, with him. At about ten minutes
of six on the following morning, the twenty-sixth, the de-
fendant appeared again at the Finney home and found his
wife in the kitchen preparing breakfast. He said ‘‘good

388 De 7

morning”’ to those present and was asked to have breakfast,
which he declined, and announced that he was about to
leave for Imperial Valley and intended to take his boy with
him. The deceased objected to his leaving home, for the
reason that he was then employed and had no prospect of
employment in Imperial Valley. She also objected to the
boy’s leaving home. The defendant was standing next to
the drainboard, behind his wife, when he fired a shot from
a 38-caliber revolver. The effect of this discharge is not
disclosed except that it caused the deceased to run to an-
other room. The defendant followed her, striking her on
the head with the barrel end of the revolver, and continued
shooting. The deceased fell to the floor. One of the bullets
struck the left hand of the defendant and lodged in his
knee, whereupon he fell to the floor beside the body of his
wife. While in this position he stripped the gun of the
empty shells, reloaded the chambers, and continued to fire
into the body of his wife.

The foregoing faets were corroborated by other witnesses
and there is no contradiction in the evidence. The autopsy
surgeon found evidence that nine bullets had entered the
body of the deceased, six in her head and face and three in
her arms and shoulders, and that the skull was fractured.
After the shooting a doctor was called. Upon his arrival
he summoned an ambulance and the wife died as her body
was being moved on the stretcher. Shortly after the doc-
tor’s appearance the defendant exclaimed, ‘‘You don’t
understand; she left me; please kill me.’’

Before the body of the deceased was removed a police
officer, responding to a call, found the defendant on the
dining-room floor, with the wife’s body beside him. The
officer, among other things, asked the defendant what was
the cause of the trouble and the reply was, ‘‘family
troubles’’.

" After his arrest the defendant stated to the officers that
he had had a quarrel with his wife; that he went to the
Finney house in the early morning armed with a revolver,
intending to do something; that rather than go on living as
they had been he “‘went with the thought in mind to kill
her’’, and that he meant to kill her.

The defendant entered pleas of ‘‘not guilty’’ and ‘‘not
guilty by reason of insanity’’, After the trial on the first

a 389

plea the jury returned the following verdict: ‘“‘We, the
jury in the above entitled action, find the defendant guilty
of murder as charged in the information and find it to be
murder of the first degree.’’? On the trial of the second
plea before another jury about two months later the
defendant was found to have been sane at the time of the
commission of the offense.

On the appeal no question is raised as to the sufficiency
of the proof, either as to the commission of murder of the
first degree, or as to the sanity of the defendant at the
time in question. [J The only assignment of error in
the record is that, by their verdict on the plea of ‘‘not
guilty’’, the jury did not agree upon the penalty of death.
The basis of the argument in that behalf is the proceedings
had when the jury returned to court in the course of its
deliberations. After the instructions were given the jury
retired at three o’clock in the afternoon. At four-thirty on
the same afternoon the bailiff informed the court that the
jury requested the statement of the defendant given to the
police officers shortly following his arrest. This statement
had been reduced to writing, and the police officers testified
by referring to it but the statement itself was not filed as
an exhibit. The jury was thereupon brought into court and
was informed by the court that said statement was not an
exhibit in the case. A juror then requested that the testi-
mony of the officers as to the contents of said statement be
read. This was done, and the jury returned to the jury-
room for further deliberations. A verdict was not reached
that night. At eleven forty-eight on the following morning
the jury was brought into court and the court inquired
whether a verdict had been found. <A negative answer was
given. The record then shows the following:

“The Court: Is there any question of law that is bother-
ing you, that the court can be of assistance to you on?

“The Juror: The question is, your Honor, can we bring
in a verdict without recommending as to the punishment?

“The Court: Yes, you can bring in a verdict without
recommending the punishment, but that casts the burden
and duty upon the court of imposing a sentence of death.
The court then has no discretion of any kind except to im-
pose judgment that the defendant suffer death. The jury
has the discretion of fixing the punishment in a first degree

390 Le |

murder case at either life imprisonment or at death. Have
I made myself clear, ladies and gentlemen?

“The Juror: I wonder if we could have another blank
that has nothing on it here about fixing the punishment?
I understand we are not to erase anything on this form.

“The Court: I can ask the clerk to prepare a form of
verdict which will not carry any recommendation whatever.
You may use it, if you find that that is the verdict you want
to arrive at.

“Now, I am handing you another form of verdict, ladies
and gentlemen of the jury, which you may use if you find
the defendant guilty at all of anything, as follows: With
the title of the court and cause, ‘We, the jury in the above
entitled action, find the defendant guilty of murder as
charged in the information, and find it to be murder in the
first degree.’ If such be your verdict, you will cause it to
be signed and dated by your foreman and return it into
court.

“May I add one more statement to you so that there will
be no error or misunderstanding about the law on the sub-
ject: You have the right, ladies and gentlemen of the jury,
to determine the punishment, if you find the defendant
guilty of murder in the first degree at all. If you find a
verdict of guilty of the first degree, you have the right to
fix the punishment at either life imprisonment or at death.
So forms for each of those verdicts have been handed to
you. If you fail to fix the punishment in your verdict, and
you merely find the defendant guilty of murder in the first
degree as charged in the indictment, it then becomes the
duty of the court, and it has no discretion but to impose
a judgment of death.’”’

At 2:25 P. M. of the same day the jury returned the
verdict in the language above quoted. The jury was polled,
the verdict recorded and reread and the trial on the plea
of ‘‘not guilty by reason of insanity’’ was set for a later
date.

On the foregoing, counsel for the defendant states: ‘‘It is
apparent from the above record of the proceedings in this
ease that the jury was seeking to avoid the responsibility of
fixing the penalty. It is clear that there was a disagreement
in the jury as to the penalty that should be imposed....

i a 391

The evidence in this case as to the guilt of appellant of
murder in the first degree (assuming, of course, that he was
sane, which is contrary to the opinion of counsel for appel-
lant), is so strong, so positive, and so certain, that it would
be stretching the imagination to the breaking point to assume
that the jury was disagreeing as to the guilt of the appellant
of murder in the first degree. Therefore, we think it is very
logical and reasonable to assume that the jury had not
agreed and could not agree as to the punishment or pen-
alty.””

Counsel for the defendant singles out the statement of
the court in answer to the question of the juror: ‘Yes, you
can bring in a verdict without recommending the punish-
ment, but that casts the burden and duty upon the court
of imposing the sentence of death,’’ as indicating that the
jury understood that the court was withholding from the
jury the duty to fix the penalty. We cannot accord to
this statement the significance sought to be attributed to it,
especially in the light of the context and the other instruc-
tions wherein the court was at pains to advise the jury at
length in certain and appropriate language, and in several
instances, that if the jury should find the defendant guilty
of murder of the first degree it would then be their duty
to fix the penalty, and that if the verdict be silent as to the
penalty the duty would be cast upon the court to impose
the penalty of death. It may be assumed that the contro-
versy among the jurors in the jury-room involved the
question of the penalty to be imposed, but it is clear from
the record that the jury knew what -it was doing and the
consequences thereof when it returned a verdict silent as to
the penalty. (See People v. Hall, 199 Cal. 451 [249 Pac.
859]; People v. Bollinger, 196 Cal. 191 [237 Pac. 25];
People v. Perry, 195 Cal. 623 [234 Pac. 890].) There is no
possible basis for the claim that in returning the verdict
the action of the jury as to the penalty imposed was not
unanimous. The case is not at all like the case of People
v. Hall, supra, relied upon by the deféndant. There the
verdict showed on its face that the jury had not come to a
unanimous agreement as to the penalty. Here, the verdict
returned under full, fair and impartial instructions from
the court shows by its language that the matter of the

592

penalty was atted upon by the jury and the record otherwise
discloses that its action thereon was unanimous.
The judgment and order are affirmed.

Curtis, J., Langdon, J., Thompson, J., Seawell, J., Preston,
J., and Waste, O. J., concurred.

[L. A. No. 14478, In Bank—March 28, 1934.]

G. H. DEACON INVESTMENT COMPANY (a Corpora-
tion) et al., Petitioners, v. THE SUPERIOR COURT
OF LOS ANGELES COUNTY et al., Respondents.

Oliver O. Clark, Victor T. Watkins and David Fulwider
for Petitioners.

Erwin P. Werner and Ray L. Chesebro, City Attorneys,
Frederick von Schrader, Assistant City Attorney, Arthur
W. Nordstrom and Arthur Loveland, Deputies City Attor-
ney, Everett W. Mattoon, County Counsel, and Beach Vasey,
Deputy County Counsel, for Respondents,

THE COURT.—After a further consideration of the ques-
tions involved in this proceeding, we find ourselves in accord
with the conclusions reached by the District Court of Appeal
in its opinion rendered therein and written by Mr. Presiding
Justice Conrey. We have therefore incorporated the major
portion of said opinion in our opinion, indicating the same
by quotation marks, and have followed it with certain ob-
servations of our own. The complete opinion and decision of
the court herein is as follows:

‘Following the commencement of an action by the City of
Los Angeles for the condemnation for public highway pur-
poses of certain property of which the petitioners were the

5

owners, the city deposited with the court the sum of $4,243.84
as security to the owners for the payment to them of just
compensation, etc., for the property proposed to be taken.
This was done pursuant to an order obtained upon ex parte
application made by the plaintiff, in accordance with the per-
mission given by section 14 of article I of the Constitution of
California. That section contains the following provisions,
pertinent to the questions now before us in this case: ‘Pri-
vate property shall not be taken or damaged for public use
without just compensation having first been made to, or paid
into court for, the owner... ; provided, that in an action
in eminent domain brought by the state, or a county, or a
municipal corporation, ... the aforesaid state or political
subdivision thereof or district may take immediate possession
and use of any right of way required for a public use
whether the fee thereof or an easement therefor be sought
upon first commencing eminent domain proceedings accord-
ing to law in a court of competent jurisdiction and there-
upon giving such security in the way of money deposited as
the court in which such proceedings are pending may direct,
and in such amounts as the court may determine to be rea-
sonably adequate to secure to the owner of the property
sought to be taken immediate payment of just compensation
for such taking and any damage incident thereto, ... as
soon as the same can be ascertained according to law. The
court may, upon motion of any party to said eminent domain
proceedings, after such notice to the other parties as the
court may prescribe, alter the amount of such security so
required in such proceedings. ... ”

‘Thus having paid into court said sum of $4,243.84, the
city immediately took possession of said property. There-
after and on the same day on which an interlocutory judg-
ment was made and entered by which the value of the prop-
erty and interest thereon was determined, the respondent
court made its order by which the said city was directed to
increase the amount of its deposit in said action in the addi-
tional sum of $75,750. Without complying with said order,
the city filed its notice of appeal from the judgment. There-
upon, in pursuance of a hearing before the respondent
court on an order to show cause why the City of Los An-
geles and certain of its officers should not be held in con-
tempt of court for their failure to comply with the order of

SS 3:

said court by which the said City of Los Angeles was so
directed to increase the amount of its deposit in the action,
the respondent court made the following order:

“*<Tn the above entitled cause defendants filed a petition
and secured an order to show cause why plaintiff, its officers,
agents and representatives should not be punished for con-
tempt, for non-compliance with an order made by the Court
herein on January 30th, 1933. The order-last above referred
to required plaintiff to deposit with the County Clerk of Los
Angeles County forthwith certain monies as an additional
amount to secure the immediate payment to defendants as
compensation for taking of their property. The plaintiff has
not complied with the order. Upon making said deposit by
plaintiff the defendants can immediately draw down said
money, and there is no provision of law to recover same in
the event a new trial is ordered on an appeal, and a lesser
amount awarded. This practically prevents plaintiff from
having an appeal from the awards made by the Court. It is
not the intent or desire of the Court to prevent plaintiff pro-
ceeding with an appeal, and it appears to me unjustified to
do so.

“*«Therefore, it is hereby ordered that plaintiff be, and
hereby is, relieved of complying with the order of the court
dated January 30th, 1933, requiring it to deposit certain
monies with the Clerk of the Court, that it be purged of
contempt and the petition dismissed.’

“Following the entry of this order the defendants in the
action procured from this court its alternative writ of man-
date by which the respondent court was directed to enforce
its former order by which the said City of Los Angeles was
required to increase the amount of its deposit in the action
as aforesaid; or that respondent court appear and show
cause why it has not enforced its said order. The writ was
directed to all of the respondents named in the petition, in-
eluding the city and certain of its officers; but it will be
sufficient for us to consider, as our principal subject, the duty
of respondent court.

“‘Respondents have replied both by demurrer to the
petition and by answer. The facts alleged by petitioner are
admitted, in all essential particulars. Therefore the case
presents for decision the single question: On the facts as
stated, does there rest upon respondent court a positive duty

596

to enforce the order requiring that said money be deposited
in court as security for the owner?

“Referring to the provisions of the state Constitution,
quoted above, we find that the city is given the privilege to
take possession of the defendants’ property in advance of
actual payment therefor, only by first depositing in court
such amount of money as the court has found to be ‘reason-
ably adequate to secure to the owner of the property sought
to be taken immediate payment of just compensation’, etc.,
as soon as the same can be ascertained according to law.
The court, by its order altering the amount of such security,
has fixed and determined the amount of the deposit to be

. made. The right of the defendants, thus determined, is
derived directly from the Constitution, and not from any
allowance thereof by the court., It is the court’s duty to
determine the amount to be deposited, and to make its order
accordingly. But the court is not vested with any discre-
tionary authority to grant or withhold the security to which
the defendants are entitled. :

Hi “‘The provisions of the statute in relation to the right
of the plaintiff, in a condemnation case, to abandon the pro-
ceeding, have no relation to the present matter. The plain-
tiff here has not abandoned the proceeding. On the con-
trary, plaintiff has taken the property and has actually made
the proposed improvement and opened it to public use.
Whatever right of election it had, with respect to availing
itself of the ‘immediate possession’ provisions of the Consti-
tution, the plaintiff has exercised. There remains the abso-
lute obligation, correlative with the owner’s constitutional
rights, to deposit in court the amount of money which has
been determined to be the amount necessary to give adequate
security.’? .

As to the ultimate right of the city of Los Angeles to
abandon said condemnation proceedings either before or after
the final decree of condemnation, we express no opinion, as
we do not consider that question is before us in this proceed-
ing, and we expressly refrain from expressing any opinion
relative thereto.

It has been suggested, as justification for the failure
of plaintiff to deposit said money, that if it does make the
deposit, the defendants will have a right to withdraw tho
money, and that their appeal from the judgment will be dis-

EE

missed on the ground that it has become a ‘‘moot ease’.
There is no merit in this suggestion. The deposit of money
in court was made in compliance with the provisions of
section 14 of article I of the Constitution. It is not subject
to withdrawal either by the plaintiff or defendant in the
condemnation proceeding until after the entry of the final
decree of condemnation, and then only by order of the court
in which it is deposited. The final decree of condemnation
can be made only after the pending appeal of the. plaintiff in
the condemnation case is disposed of. Plaintiff therein is,
therefore, not prejudiced in any manner in its right of ap-
peal therein, nor does any question become moot by reason
of its compliance with said order of January 30, 1933. As
to the status of money deposited in court under said section
of the Constitution, see Marblehead Land Co. v. Superior
Court, 60 Cal. App. 644, 652 [213 Pac. 718], where the
court in discussion of that question said: ‘‘It is to be ob-
served that, as a prerequisite to the making of an order for
Possession and use, the Constitution provides that the plain-
tiffs in a condemnation suit shall give ‘such security in the
way of money deposits as the court . . . may direct, and in
such amounts as the court may determine to be reasonably
adequate to secure to the owner... immediate payment of
just compensation ... as soon as the same can be ascer-
tained according to law.’ It is certain that, when such
money deposits are made and the consequent order for pos-
session and use follows, the court making the order has ex-
elusive control of the money deposited. The cash is to be
deposited merely as security for the immediate payment of
compensation when the amount of compensation is ascer-
tained. For the time being neither the plaintiff nor the
defendant has any right to the possession of it and neither
may exercise any control over it. If the compensation is not
paid by the plaintiff to the defendant immediately, or per-
haps within a reasonable time, after the amount to be paid
is fully ascertained, then the court must make some order
transmitting the money deposited from security into pay-
ment. That is, the cash must by appropriate order be turned
over to the defendant. If the compensation be promptly
paid by the plaintiff, then the court perforce must order the
cash to be returned to the plaintiff.’? JJ The rule is
entirely different where the plaintiff in a condemnation pro-

398 Le 7

ceeding attempts to act under section 1254 of the Code of
Civil Procedure and in pursuance of the terms of that sec-
tion deposits money in court in order to secure possession of
the property sought to be condemned. Under said section
of the code, as expressly provided therein, the money de-
posited in court must under order of court be paid to the
defendant upon his filing a satisfaction of the judgment.
This difference between the provisions of the section of the
Constitution and those of the code section renders the case
of Mt. Shasta Power Corp. v. Dennis, 66 Cal. App. 186 [225
Pae. 877], relied upon by the respondents, readily distin-
guishable from the instant case. In that case the condemnor, a
public service corporation, in pursuance of section 1254 of the
Code of Civil Procedure, deposited in court the full amount
of the judgment rendered against it in order that it might
take possession of the property involved in said action. At
the same time it attempted to appeal from said judgment.
The court very properly held that as it had paid and satis-
fied the judgment in full, no appeal would lie therefrom and
accordingly dismissed the appeal.

In our opinion it is the present duty of the city of Los
Angeles to deposit in court the amount of the required secu-
rity, and it is the present duty of the respondent court to
enforce its order in the premises,

Let the peremptory writ issue.

[L. A, No, 13943, In Bank.—March 28, 1934.]

PEARLE A. SUTCLIFFE, Appellant, v. WALTER J.
SUTCLIFFE, Respondent.

Weber & Kidder, Vincent A. Marco and Kidd & Marco
for Appellant.

Warren L. Williams and Seymour 8. Silverton for Re-
spondent.

WASTE, C. J—Appeal from an order denying a motion
to vacate an interlocutory decree of divorce. The appellant
commenced an action against the respondent for divorce.
She alleged in her complaint that there was certain com-
munity property, both real and personal. The respondent
filed an answer and a cross-complaint in the divorce action,
and also instituted an action against the appellant for parti-
tion of the real property involved in the divorce action. The
two actions came on together for trial through stipulation
that evidence introduced in either case be deemed introduced
in the other when relevant, competent and material to the
issues involved. The respondent [plaintiff in the partition
suit] introduced evidence and rested his case. The parties
then, by their respective counsel in open court, stipulated to
a dismissal of the partition suit and to an agreed division of

400 a 7

the property described in the appellant’s complaint in the
event the court granted a divorce. The respondent there-
upon, also in open court, dismissed his answer to appellant’s
divorce complaint and his cross-complaint filed in the action,
and appellant dismissed her answer to the cross-complaint.

Evidence in support of the appellant’s divorce action was
introduced; respondent introduced no evidence, and the
court granted an interlocutory decree of divorce to the appel-
lant, and therein ordered the community property divided in
accordance with the stipulation previously made in open
court. The appellant contends that the court erroneously
awarded a valuable parcel of the real property to the defend-
ant, when it was, according to the appellant, stipulated that
said property was to be awarded to plaintiff [appellant].
Her contention that there was this discrepancy between the
stipulation and the decree presents the only situation in-
volved in this appeal.

After the time had passed for moving for a new trial or for
an appeal from the decree, the appellant, plaintiff below,
through new and substituted counsel, mioved the court, under
section 473 of the Code of Civil Procedure, to set aside the
decree on the ground that it was entered through mistake,
inadvertence, surprise and excusable neglect of herself and
counsel, and upon the further ground that the cause was not
at issue when the trial was had. In support of the motion,
the appellant filed a number of affidavits, including her own,
the substance of which is that prior to the day of the court
proceedings she had been ill and was suffering great and ex-
eruciating pain, because of which, and for other reasons, she
was unable to prepare for trial, and also fully expected a
continuance because her counsel was busy with other matters;
that such continuance was not had; that on the day of trial,
while in court, she was still suffering excruciating pain and
was in such mental condition that she did not understand the
nature of the proceedings or comprehend the effect of the
stipulation concerning the ‘division of the community prop-
erty, or understand the language used by her counsel; that
she was of the view that she was awarded the parcel of
property which, she now complains, was awarded erroneously
to the respondent, and did not know otherwise until after the
adjournment of court when she was informed of the fact by

SS ‘01

her brother who was in court at the time. Appellant further
alleged in her affidavit that, although she made repeated
efforts and continued persistently in an effort to get her
counsel to endeavor to have the alleged erroneous award cor-
rected, her efforts were unavailing. Counter-affidavits were
made and filed which were, in turn, followed by affidavits in
rebuttal. The trial court denied the motion to vacate and
set aside the decree. From that order the appeal is taken.

HI No record of the proceedings had upon the motion to
vacate the decree has been presented, other than the notice of
motion, the large number of affidavits, and the minute order
denying the motion, all of which were found in the clerk’s
transcript. There is neither bill of exceptions nor certificate
of attestation by the trial court as to what papers, evidence
or affidavits were before the court or were used on the hear-
ing of the motion. The situation, therefore, comes squarely
within the application of Rule XXTX of the Supreme Court
(213 Cal. lviii). | | It is a settled rule that if any
matters, other than such as appear upon the face of the
judgment-roll, are sought to be reviewed upon appeal, the
record thereof must be presented by a bill of exceptions or
by a reporter’s transcript. (Stern & Goodman Inv. Co. v.
Danziger, 206 Cal. 456, 458 [274 Pac. 748]; Jeffords v.
Young, 197 Cal. 224, 227 [239 Pac. 1054]; Guyot v. Cassab,
118 Cal. App. 742, 746 [5 Pac. (2d) 912].)

The affidavits found in the clerk’s transcript were not
merely a part of moving papers submitted to the judge as
the basis of an ex parte order, but are evidentiary in char-
acter and had as their object the vacation or prevention of
the vacation of the interlocutory decree. We are not in-
formed, by any record, whether or not these affidavits were
submitted or read to the court.

In the absence of a proper record, an appeal must be dis-
missed or the order or judgment affirmed. | | Were we in
position to give consideration to this cause on its merits, we
would be required to affirm the order, for the affidavits are
sharply contradictory. It is not incumbent on this court to
seek the truth in such a case. That was a duty resting on
the trial court, and we will assume that it has been properly
performed.

a

2

The writ of swpersedeas, heretofore ordered to remain in
effect until the determination of the appeal, is discharged,
and the order appealed from is affirmed.

Shenk, J., Thompson, J., Seawell, J., Curtis, J., Preston,
J., and Langdon, J., concurred,

[L. A. No, 14459. In Bank—March 28, 1984.]

JACOB HANSEN, Plaintiff and Appellant, v. FRESNO
JERSEY FARM DAIRY COMPANY (a Corporation),
Defendant and Appellant.

0, es

Irvine P. Aten for Plaintiff and Appellant.

Everts, Ewing, Wild & Everts, Pillsbury, Madison &
Sutro, Dan F. Conway and Eugene D. Bennett for Defend-
ant and Appellant.

SHENK, J.—Cross-appeals from a judgment for the
plaintiff in an action for damages for breach of contract.

On April 1, 1930, the parties entered into a written
agreement for the sale and delivery by the plaintiff to the
defendant of approximately eighty gallons of milk daily
f. 0. b. Fresno. The defendant agreed to pay for butter
fat content of the milk at eighty-five cents per pound for
all milk less two cents to cover costs of hauling for each
gallon of milk shipped. That price was referred to in the
contract as the basic price. Payments for milk delivered
were to be made monthly on the fifteenth of each month for
milk received during the preceding calendar month on
statements to be made up and rendered by the defendant
to the plaintiff. The contract was to continue for one year
and be renewed automatically from year to year unless
written notice was given by either party at least thirty days
prior to the first or any subsequent expiration date. The
contract contained the following provision: ‘‘It is further-
more agreed that whenever and whilst buyer reduces its
price to customers in order to meet competition, or on ac-
count of a milk price war in Fresno, said basic price for
milk hereinabove fixed shall stand reduced for the time of
continuance of buyer’s said reduced price, in an amount
equal to one-half of said reduction.’’

The plaintiff delivered milk which was received and paid
for by the defendant at the basic price stated in the con-
tract. On May 28, 1930, the defendant reduced the price
to the plaintiff two cents per gallon. Effective August 1,
1930, the defendant made a further reduction of four cents
per gallon in the price to the plaintiff. The defendant con-
tinued to receive the plaintiff’s shipments. The defendant
each month sent to the plaintiff a statement of milk deliv-
ered during the preceding month, accompanied by a check
covering the amount thereby shown to be due on the basis

SS :0°

of the reductions made by the defendant. The plaintiff re-
tained the proceeds from those checks.

On March 5, 1981, the plaintiff received from the defend-
ant a letter dated March 1, 1931, and postmarked March 4,
19381, purporting to give notice of cancellation of the con-
tract effective April 1; 1931. On and after April 1, 1931,
the defendant refused to receive further deliveries of milk
from the plaintiff. .

The plaintiff in the present action sought to recover the
difference between the amounts paid by the defendant and
the amount computed upon the basic price stated in the
contract without reduction except the reduction of May 28,
1930, for all milk delivered during the period between
August 1, 1930, and April 1, 1931. The plaintiff also
sought to recover damages for the defendant’s refusal to
accept deliveries of milk during the second year of ths
contract period. As to the latter item of damages the de-
fendant pleaded the giving of the aforesaid notice, and as
to the first item, the defendant alleged that the plaintiff and
defendant had stated their accounts under said contract
and that upon each of such accounts the defendant had paid
to the plaintiff the sum so computed to be due thereon.

The trial court found that at the time the contract was
entered into and on May 28, 1930, when the defendant made
its first reduction in the price to be paid to the plaintiff
under the contract, it was selling and disposing of almost
all of its milk to retail customers, and but twenty per cent
thereof to wholesale customers; but that at the time it made
its second reduction effective, viz. August 1, 1930, because
of existing conditions in the market the defendant was dis-
posing of but fifteen per cent of its milk at retail and eighty-
five per cent to the wholesale trade.

The court further found that on May 28, 1930, the de-
fendant cut the price to its retail customers four cents per
gallon and twelve cents per gallon to its wholesale trade,
and at the same time cut the price to be paid to the plain-
tiff two cents per gallon; that it paid to the plaintiff the
basic price mentioned in the contract less two cents per gal-
lon from May 28 to August 1, 1930; that the defendant made
no additional or further reduction in the price of milk
to its customers, but on August 1, 1930, when the bulk of
its trade had become wholesale, the defendant cut the price

400

to the plaintiff an additional four cents per gallon. The
court further found that there was due to the plaintiff an
additional four cents per gallon on fifteen per cent of the
milk delivered by the plaintiff between August 1, 1930, and
April 1, 1931, amounting to the sum of $109.92.

The court also found that the defendant had not given
notice of termination pursuant to the terms of the contract.
Based on the same percentages of retail and wholesale trade,
damages in the sum of $1878.02 were found to be due
by reason of the defendant’s refusal to receive deliveries
from the plaintiff during the second year of the contract.
The court found further that no account was ever stated
between the plaintiff and the defendant concerning any por-
tion of the milk delivered between the first day of August,
1930, and the first day of April, 1931. Judgment for the
plaintiff was entered for the sums found to be due. Both
parties appealed from the judgment.

On its appeal the defendant contends that the evidence
establishes as.a matter of law that an account was stated
between the parties and that the trial court erred in refus-
ing to admit evidence offered of oral notice of termination
of the contract and evidence in support of certain breaches
of contract by the plaintiff alleged in the defendant’s
answer,

The defendant alleged and offered to prove oral
notice to the plaintiff prior to the sending of written notice
and within the time specified. Under the terms of the con-
tract the plaintiff was entitled to the written notice as pro-
vided. There was no evidence tendered or received to prove
that the plaintiff expressly or by his conduct waived the
required notice, nor, under the facts offered, was he, as
in the case of Mason v. United Press of Illinois, 94 App.
Div. 617 [88 N. Y. Supp. 99], relied upon, legally charge-
able with notice within the time specified.

The trial court further found that the plaintiff had
fully kept and performed all of the terms and conditions of ©
the contract up to and including the first day of April,
1931, when further deliveries of milk were refused by the
defendant. The defendant claims error in the rejection of
evidence offered to prove that the plaintiff had breached the
conditions of the contract and was not entitled to recover;
and specifically, that the plaintiff had not complied with

EE

the requirements for certain standards of cleanliness, flavor
and condition of the milk, as well as certain standards of
sanitation in the maintenance of the plaintiff’s dairy. On
the documentary evidence in the record the trial court was
justified in concluding that any such breach on the part of
the plaintiff was waived by the defendant. The purported
written notice contained the following statement: ‘“‘Our
business relations have been most agreeable and we look
forward to being in a position to do business with you
again at some future date.’’? Furthermore, the contract
provided the disposition to be made by the defendant of
milk delivered by the plaintiff which did not comply
with the required standards. The parties agreed that ‘‘no
milk shall be delivered, nor shall any milk be required to
be paid for that does not in all respects meet the require-
ments... . Any milk shipped with a foreign odor, caused
from feeding, barn or any other conditions, the buyer will
have the right not to pay for, or in its discretion allow
only market price at Fresno of butter fat for said milk.
...?? The defendant did not offer to prove that it had
refused to pay for any milk which it accepted from the
plaintiff and which was included in its statements of
account; nor does its accounts show that it had exercised
the discretion vested in it by those provisions, or that any
reduction in the contract price was based thereon. On the
contrary, its statements of milk received, so far as the
record shows, were based on a compliance by the plaintiff
with the terms of the contract. The plaintiff is not en-
deavoring to recover for any milk except such as the de-
fendant’s accounts show was received by it.

On the defendant’s appeal there remains for considera-
tion the contention that the evidence does not support the
finding that no account was stated between the parties.
Although generally accounts are rendered by the creditor
to the debtor, it is conceivable that pursuant to a relation-
ship such as existed between these parties, accounts are
expected to be rendered by the party by whom the goods
are received and from whom payment is due. Moreover,
the contract provides for accounts to be rendered by the
defendant. JJ The theory of an account stated is that it
becomes a contract between the parties for payment of the
amount computed to be due without proof of the specific

$08

items included therein. (Awzerais v. Naglee, 74 Cal. 60,
64 [15 Pac. 371].) Therefore an element essential to
render the account stated is that it receive the assent of
both parties, but the assent of the party sought to be
charged may be implied from his conduct. (Crane v.
Stansbury, 173 Cal. 631, 636, 687 [161 Pac. 7]; Hendy v.
March, 75 Cal. 567 [17 Pac. 702]; Auzerais v. Naglee,
supra; 1 Cor. Jur., p. 685 et seq.) Accordingly an account
fails to become stated when the essential clement of assent
is lacking; and assent is not present when proper objec-
tions are made by the party sought to be charged. (Klein-
Simpson Co. v. Hunt, Hatch & Co., 65 Cal. App. 625, 633
(225 Pac. 14].) [J Ordinarily an account stated is an
unperformed promise or agreement to pay the amount
shown to be due. However, acceptance of payment of the
amount shown to be due on an account rendered may
render it an account stated, but it is essential to constitute
the transaction an account stated that such payment be
accepted without objection. (1 Cor. Jur. 689.) Hi There
is evidence in the record that at the time the reduction of
August 1, 1930, was announced and subsequently during
at least a portion of the time the defendant’s statements
of account and checks were received, the plaintiff personally
and through the Dairymen’s League, of which he was a
member, protested the reduction made by the defendant as
arbitrary and not in accordance with the terms of the con-
tract. On this record and in view of the contractual rela-
tionship between the parties and the requirement for
monthly accounts and payments, we cannot say that the
court was not justified in concluding that there was no
assent on the part of the plaintiff to the accuracy of the
account. The plaintiff makes the contention that the ac-
counts sent to him may not constitute accounts stated for
the additional reason that to allow them as such is to do
violence to the rule that parol evidence may not be per-
mitted to vary or contradict the terms of a written agree-
ment. An exception to the rule is that an executed oral
agreement may serve as a modification of a written agree-
ment. (Julian v. Gold, 214 Cal. 74, 76 [3 Pac. (2d) 1009].)
In the present case the point is immaterial inasmuch as the
record, as noted, supports the finding that no oral agreement
was proved.

SS

The defendant relies upon the case of Blue Ribbon Cream-
ery v. Monk, (Miss.) 147 So. 329, asserted to be similar on
its facts to the case at bar. That case in part turned on the
question whether the trial court properly decreed that no
balance was due to the dairymen because there had been
accord and satisfaction by the acceptance of the amounts
tendered in semi-monthly settlements for milk delivered.
It was determined that the acceptance of the semi-monthly
settlements constituted an accord and satisfaction. [J The
question whether the evidence in the present case sustains
any finding that the acceptance of the monthly checks by
the plaintiff was an accord and satisfaction is not presented,
inasmuch as the specific plea of accord and satisfaction was
not interposed by the defendant, the issue was not raised,
and consequently there was no finding based thereon. It
is a general rule that accord and satisfaction must be
specially pleaded. (Berger v. Lane, 190 Cal. 448, 447 [213
Pac. 45]; Simmons v. Owllahan, 75 Cal. 508 [17 Pac. 543];
see California etc. Assn. v. Rindge L. & N. Co., 199 Cal.
168, 180 [248 Pac. 658, 47 A. L. R. 904], Sierra etc. P.
Co. v. Universal Elec. etc. Co., 197 Cal. 876 [241 Pac. 76],
and B. & W. Engineering Co. v. Beam, 23 Cal. App. 164
[187 Pae. 624].) [| However, if we assume that the
pleading of an account stated and payment thereunder calls
for the application of the principles involved in the doctrine
of accord and satisfaction, nevertheless the question whether
there is an accord and satisfaction is one primarily for the
trial court; and the question here, since payment is not dis-
puted, is whether the evidence supports the implied finding
of the court that there was no accord between the parties.
On the evidence hereinabove noted we do not feel justified
in disturbing that conclusion.

Hl The plaintift’s appeal is prosecuted on the theory
that the damages are inadequate as to both items. It is
his contention that the trial court misconstrued the provi-
sions of the contract relating to the basic price and the

. method by which it might be reduced. It is claimed that
inasmuch as most of the defendant’s trade was with retail
customers at the time of the agreement, the basic price com-
puted thereon must always remain based on the price to
the defendant’s retail trade and could not be reduced below
the plaintiff’s proportionate share of the reduction made

410 es

to retail customers even though the trade with retail cus-
tomers fell to a negligible proportion due to the cheaper
prices to the consumer available at the stores. There
is no such limitation in the terms of the contract. The
provision purports to include any reduction in the de
fendant’s ‘‘price to customers in order to meet competition
or on account of a milk price war in Fresno’’. This pur-
ports to include both classes of customers, retail and whole-
sale. We conclude that the trial court properly construed
the contract between the parties, and that no error was
committed in the trial of the cause.
The judgment is affirmed.

Langdon, J., Thompson, J., Seawell, J., Preston, J.,
Curtis, J., and Waste, C. J., concurred.

Rehearing denied.
Le

[S. F. No, 15027. In Bank,—March 28, 1934.]

ELIZA F. H. MIDDLECOFF, Petitioner, v. THE SUPE-
RIOR COURT OF LOS ANGELES COUNTY et al.
Respondents.

Lafayette J. Smallpage and Charles H. Epperson for
Petitioner.

Hewitt & Perkins and Charles W. Dempster for Respond-
ents.

THE COURT.—This is an original proceeding in man-
damus to compel the respondent Superior Court to enter-
tain jurisdiction and to proceed with the hearing of a peti-
tion for removal of the respondent Lowell L. Middlecoff as
trustee, and to settle his account.

In 1909 and 1910 judgments in two partition proceedings
were entered in the Superior Court in and for the County
of Los Angeles, wherein W. W. Middlecoff, the then husband
of the petitioner, Eliza F, H. Middlecoff, was appointed as
trustee to receive the proceeds from the sales of real prop-
erty involved in those proceedings, and to invest and rein-
vest such proceeds and apply the income therefrom to the
purposes of the trust. Those partition proceedings were

412 Pc let

numbered respectively 67,314 and 73,998 in the records of
the respondent court. By those judgments the ownership
of the petitioner during her lifetime in all but a small pro-
portion of said properties, and the common ownership in
the remainder of her two minor sons, Henry Hubbard
Middlecoff and Robert Fitch Middlecoff, were decreed. A
sale of the properties was provided for and had, the pro-
ceeds to be held in trust with the same rights of ownership
as the property sold, the income therefrom to be paid to the
beneficiaries in the same proportion, The trustee was
directed to discharge the duties of his trust subject to the
order and approval of the court as to the matter of invest-
ment of the proceeds. The judgment directed the trustee
to report to the court as required by the court and by law
until his discharge. A bond in the sum of $40,000 was re-
quired. The trustee so appointed duly qualified and en-
tered upon the discharge of his duties.

On December 14, 1910, W. W. Middlecoff, as trustee, with
the approval and authority of the respondent court in, said °
proceedings, made a loan of the trust funds consisting of
the sum of $42,650 to the petitioner. Also, with the ap-
proval and authority of the court, the trustee received from
the petitioner, as sceurity for the loan, a mortgage on im-
proved property in Los Angeles called the Iris Apartments.
This mortgage was duly recorded. W. W. Middlecoff dis-
charged the duties of trustee of said trusts until April 30,
1914, on which date he resigned, and Los Angeles Trust and
Savings Bank was appointed by the court to succeed him as
such trustee.

On July 20, 1915, the petitioner executed a deed of the
fee of the Iris Apartments to Los Angeles Trust and Sav-
ings Bank. On July 22, 1915, the bank executed a declara-
tion of the trusts upon which it held said property, which
was also signed by the petitioner. It provided that the
income from the property was to be paid by the bank, as
trustee, to the petitioner during her lifetime. The trustee
was given the right to sell the property at any time a sale
might be necessary or desirable, with the right to mortgage
the property to seeure any loan to be used in repairing or
improving the property, or in paying taxes or assessments.
The declaration provided that the conveyance to the trustee
should not have the effect to merge the existing mortgage

re 413

for $42,650 and the fee, but the mortgage should subsist as
a lien against the property and in the event of a sale the
loan should be paid by the trustee out of the proceeds of
the sale. This trust will be designated herein as the private
trust.

In November, 1928, the bank resigned as trustee of the
private trust. On November 28, 1928, in a proceeding in
the respondent court numbered 266,277, the bank’s resigna-
tion was received and the respondent Lowell L. Middlecoff
was appointed by the court to succeed it as such trustee,
and to serve without bond. The bank also resigned in pro-
ceedings numbered 67,314 and 73,998, and Lowell L. Middle-
coff was also appointed its successor in those trusts to serve
without bonds.

On December 24, 1928, Lowell L. Middlecoff, as trustee-
mortgagee, without the order or approval of the respondent
court and without repayment of the loan of $42,650, released
and satisfied of record the mortgage on the Iris Apartments
given to secure said loan, On January 9, 1929, as trustee
of the Iris Apartments, he obtained a loan of $20,000 from
the Pacific Mutual Life Insurance Company and executed
as trustee a deed of trust of the Iris Apartments as security.

On July 19, 1932, Lowell L. Middlecoff filed in the re-
spondent court his first report and account as trustee, and
entitled his said report in all of said proceedings numbers
67,314, 73,998, and 266,277 consolidated. The matter was
set for hearing on August 10, 1932. The petitioner filed her
objections to the settlement of the account as rendered. The
hearing on the account and the objections thereto was con-
tinued from time to time until finally, after repeated ap-
plications of the petitioner, it was set for August 4, 1933.
On July 18, 1933, the petitioner filed in the respondent
court, entitled in all three consolidated proceedings, her
petition for removal of Lowell L. Middlecoff as trustee.
In addition to said Lowell L. Middlecoff as such trustee,
she named as respondents in her petition for removal, her
two sons, now adults, as beneficiaries, and her divorced hus-
band, W. W. Middlecoff. An order to show cause was
issued and personally served on the respondents. August 4,
1933, was designated as the return date in the order. The
petition for removal charges a conspiracy between Lowell L.
Middlecoff and W. W. Middlecoff to defraud the petitioner

414

as beneficiary of the trusts, and charges the receipt by
W. W. Middlecoff of the proceeds of the loan obtained from
the Pacific Mutual Life Insurance Company. The petition
for removal, among other things, also alleges that, although
a sale of the Iris Apartments is reported by the trustee for
the sum of $40,000, in truth the property was sold for the
sum of $45,000.

The respondents named in said petition for removal filed
their ‘‘objection to jurisdiction’? entitled in all three pro-
ceedings, whereby they entered their objection to the settle-
ment of the account of the trustee on the ground that the
respondent court had no jurisdiction of the subject matter of
said account, or of the private trust mentioned therein, or of
the parties thereto. The respondents named in said petition
for removal filed a demurrer to the petition for removal
also entitled in all three proceedings consolidated. Special
grounds of demurrer, among others, were that the respondent
court had no jurisdiction of the subject matter involved in
ease No, 266,277, nor of the declaration of the private trust
described therein, nor of the parties thereto; and that the court
in said proceedings numbered 67,314 and 73,998 had no juris-
diction of the subject matter of the private trust mentioned in
proceeding numbered 266,277. The respondent court made its
order declining to hear and determine the account and the
objections thereto, or the petition for removal of the trustee
and the order to show cause issued thereon, on the ground
that it had no jurisdiction thereof; whereupon the petition
herein was filed. The matter is submitted on the petition
and the answer of the respondents thereto.

In the respondents’ answer it is alleged that although the
account filed on July 19, 1932, contained the numbers in all
three proceedings, said account nevertheless had no reference
to the acts done by the trustee under said trusts except with
reference to the subject matter of said private trust of the
Tris Apartments, and contains also a statement of receipts
and disbursements with respect only to income from said Iris
Apartments and property purchased with the proceeds from
the sale thereof, and other matters in connection only with
said Iris Apartments and said private trust. It is further
alleged in the answer that during the course of the hearing
on the demurrer to the account and the petition for removal
in the respondent court, Henry Hubbard Middlecoff filed a

Pee

complaint for partition respecting all of the property in-
cluded in said private trust and in said trusts involved in
proceedings numbered 67,314 and 73,998, and that said com-
plaint in partition is numbered 360,833 in the records of the
Superior Court in and for Los Angeles County. A copy
thereof is annexed to the respondents’ answer herein. Said
complaint names as defendants, Robert Fitch Middlecoff, an
incompetent person, by W. W. Middlecoff, his guardian;
Eliza F. H. Middlecoff, the petitioner herein; Lowell L.
Middlecoff, as trustee, and several fictitious defendants. It
is alleged further that the attention of the respondent court
was called to the fact of the initiation of such proceeding by
the filing of said complaint in partition, and that Lafayette
J. Smallpage, the attorney representing the petitioner, there-
upon in open court accepted service of said complaint on her
behalf; that prior to the filing of the petition for writ of
mandate herein the petitioner filed and served her answer
to said complaint. The respondents assert by their answer
and by said complaint that prior to the filing of the petition
for the writ of mandate the petitioner became chargeable
in said court trusts with the sum of $13,150, the difference
between the loan to her of $42,650, and the sum realized
on the sale of the Iris Apartments; that in the private trust
the petitioner became charged with the additional sum of
$5,800, which it is alleged is $4,800 more than the petitioner’s
full interest in that trust. The respondents also allege that
the petitioner has a plain, speedy and adequate remedy at
law and in equity in said partition action No. 360,833.

The respondents rely principally upon the cases of Gillette
v. Gillette, 122 Cal. App. 640 [10 Pac. (2d) 760], and
State v. Muench, 217 Mo, 124 [117 S. W. 25, 129 Am. St.
Rep. 536], to support their contention that the respondent
court has no jurisdiction to settle the account filed by the
trustee or to hear the petition for his removal as trustee.
‘We may take the declaration in the case of State v. Muench,
supra, to be a correct statement of the law, where not incon-
sistent with pertinent statutory provisions, viz, that the
court in the matter of a private trust, having appointed a
new trustee and provided for his bond and invested him with
title, has exhausted its jurisdiction over the subject matter,
and that the court thereafter has no power to administer
the trust or settle the account of the trustee. In the case

416 |

of Gillette v. Gillette, supra, it was determined that the court
was without jurisdiction to settle an undisputed voluntary
account of the trustee of a strictly private trust, or to fix
the amount of compensation to be paid the trustees and their
attorneys for their services in such a matter. The court
there, however, excluded from the effect of its declaration
any such matter as to which there was a dispute or contro-
versy.

‘We may, on the facts presented, assume that if the account
voluntarily filed by the trustee is in truth and in fact an
account strictly of his activities, receipts and disbursements
in relation only to the private trust, the court in said pro-
ceeding numbered 266,277 had no further jurisdiction to act
in the matter. We may also assume without deciding that in
such a case, where a controversy exists, the processes of
the court in an independent proceeding should be invoked.
HM But the case before us is not as simply disposed of as
asserted by the respondents. The respondent court has
power pursuant to section 2283 of the Civil Code to remove
any trustee who has violated or is unfit to execute the trust.
If the petition for removal pertained only to the private
trust, no contention is or can be made that the jurisdiction
of the court would not properly have been invoked on the
same steps here pursued, should the petition for removal be
considered as having been filed as an independent proceed-
ing. The contention appears to be that because the petition
was filed in said proceeding No. 266,277, it may not be con-
sidered as the initiation of a proceeding to obtain the re-
moval of the trustee pursuant to said section 2283, We find
ourselves unable to subscribe to such a proposition, at least
on the facts here presented. The respondents do not deny
the allegation that prior to the filing of the account, on
the application of the trustee, proceeding No. 266,277 was,
by order of court, consolidated with the other proceedings
in which the court unquestionably had jurisdiction, and in
contemplation of law the consolidated action is one proceed-
ing. The petition for removal of the trustee, so far as the
record shows, is not limited to a petition to remove him as
trustee of the private trust alone. The petitioner is ap-
parently seeking to remove him also from the trusteeship of
the trusts involved in proceedings numbered 67,314 and
78,998, as to which there is no question of the continuing

jurisdiction of the respondent court. In the consolidated
proceeding all of the activities of the trustee have become
the subject matter for investigation by virtue of the filing
of the petition for removal which now presents the contro-
versy respecting all three trusts. There is nothing presented
on the record before us to show that the petition for removal
filed by the petitioner was not properly addressed to the
equity jurisdiction of the respondent court. (In re Thomp-
son, 101 Cal. 849 [85 Pac. 991, 36 Pac. 98, 508]; 25 Cal. Jur.
830; 26 R. C. L. 1276.)

HI Moreover, with respect to the account alone, the
court in proceedings numbered 67,314 and 73,998 is not
bound by the parties’ statement that the account relates
exclusively to the subject of the private trust. The trust res
in those court proceedings was the mortgage given to secure
the loan of the trust funds to the petitioner. Upon the fact
being disclosed by the petitioner’s objections to the account
that the trustee without authority or repayment released
and satisfied the mortgage of record, it might well be con-
tended that he was accountable in proceedings numbered
67,314 and 73,998 for any impairment to the security by
virtue of the unauthorized release and the unauthorized nego-
tiation for a further encumbrance on said property to secure
the $20,000 loan, and that the respondent court had power
in those proceedings to investigate the account of the trustee
and his further activities in relation to the property secured
by said mortgage. Upon this additional reasoning we think
the respondent court was not justified in refusing to pro-
ceed to a hearing of the account pursuant to the jurisdic-
tion vested in it in proceedings numbered 67,314 and 73,998.

Hj In support of their allegation that the petitioner has
an adequate remedy at law and in equity, the respondents
contend that the petitioner may be afforded in said partition
proceeding numbered 360,838 all the relief which she seeks
in said consolidated proceedings. The respondents rely upon
the case of Turney v. Morrissey, 22 Cal. App. 271 [134 Pac.
835]. In that case the petitioner sought by a proceeding
in mandamus to obtain equitable relief as to matters which
were more appropriately the subject of an action in equity,
and it was held that the petitioner was not entitled to a
writ of mandate to secure the relief sought. That is not the
situation here. On the present record it is shown that the

a

1S

petitioner has invoked an adequate remedy in the appropri-
ate equitable proceeding, i. e, by filing her petition for
removal; and the only question before us is whether the
respondent court has jurisdiction to grant the equitable re-
lief sought. Mandamus is a proper proceeding in which to
determine that question.

The alternative writ hereinbefore issued is made per-
emptory.

Rehearing denied.

(L. A. No, 13121, In Bank—Mareh 30, 1934.]

GUY COBURN, INC. (a Corporation), Appellant, v. TIF-
FANY PRODUCTIONS, INC. (a Corporation) et al.,
Respondents.

Jerome H. Kann for Appellant.

No appearance for Respondents.

SS «

WASTE, C. J—This is an appeal from judgment of non-
suit entered pursuant to motion of defendants at the close
of plaintiff’s case. Plaintiff asked an accounting of moneys
received by defendants from the distribution and sale of
motion picture films in which the plaintiff corporation
claimed an interest by reason of the assignment to it of the
beneficial rights of one of the parties, and the asserted rati-
fication thereof and recognition of plaintiff’s rights by the
other original party to the contract.

The transcript was filed in this court in July, 1931, and
the appellant’s opening brief was filed September 12, 1931.
No brief was filed on behalf of respondents, and after several
extensions of time therefor, there was no further application.
The plaintiff and appellant having failed to request that the
ease proceed in regular order, notwithstanding respondents’
failure to file brief, as would have been appropriate under
the circumstances, an order was issued to respondents to
show cause why the judgment should not be reversed or
other appropriate order made upon the appeal. On the
day fixed in said order there was no appearance on behalf
of respondents and no explanation has been made of the
default. It is provided in section 1 of Rule V of this court
that in such a situation the court may, in its discretion,
decide the case upon the statement of facts contained in ap-
pellant’s opening brief. In this cause an extended state-
ment of facts seems unnecessary. [| At the inception
of the trial in the court below, attorneys for defendants and
the trial judge brought to the attention of plaintiff a defect
in the complaint consisting:of failure to include therein an
allegation that the plaintiff relied in part upon written in-
struments, as was then required by section 447 of the Code
of Civil Procedure. In the ensuing discussion attorney for
plaintiff stated: ‘‘If it is necessary to amend to that extent
we would ask leave to do so,’’ to which counsel for defend-
ants replied: ‘‘We object to that procedure. We have been
trying to find out what they were relying on. We took a
deposition of the defendants [plaintiff] to try to find out
what they relied on and we could not find out anything
about it so we object to anything of the kind at this time.’’
There was no ruling by the court upon the request to amend

P|

nor the objection thereto, and it does not appear that plain-
tiff renewed the request or sought a ruling thereon.

There are fifteen documents attached to the record as
exhibits, some of which were admitted in evidence and others
marked for identification, and it seems obvious that as a
matter of fact the plaintiff was relying upon written instru-
ments to establish the cause of action; and it seems equally
obvious from an inspection of the reporter’s transcript that
objections to evidence were predicated upon, and the rulings
of the trial court were influenced largely by, plaintiff’s fail-
ure to insert what was deemed by the court to be an essential
allegation, under the provisions of section 447 of the Code
of Civil Procedure as it then stood.

While failure to plead a cause of action may be raised at
any stage of the litigation, that point was not included in
the grounds of the motion for nonsuit. In view of the evi-
dence before us, the motion for nonsuit should have been
denied, and the granting thereof was error.

It may be well to here note the fact that the legislature
of 1933 removed from section 447 the provision which appel-
lant attacks herein.

The judgment is reversed and the cause remanded to the
trial court with directions to proceed with the trial from the
point where plaintiff rested its case.

Curtis, J., Langdon, J., Preston, J., and Shenk, J., con-
eurred. :

[L. A. No. 14008, In Bank.—March 30, 1934.]

SOUTHERN CALIFORNIA EDISON COMPANY, LTD.
(a Corporation), et al., Petitioners, v. STATE BOARD
OF EQUALIZATION OF THE STATE OF CALI-
FORNIA, Respondent.

Roy V. Reppy and E. W. Cunningham for Petitioners.

U.S. Webb, Attorney-General, and H. H. Linney, Deputy
Attorney-General, for Respondent.

Thomas J. Straub and W. H. Spaulding, as Amici Curiae
in Behalf of Petitioners.

CURTIS, J.—Petitioners, the Southern California Edison
Company, Ltd., a corporation, and the San Joaquin & EHast-
ern Railroad Company, a corporation, filed herein their peti-
tion asking for an alternative writ of mandate requiring
respondent, the State Board of Equalization, to grant certain
credit on future payment of taxes to become due from peti-
tioners, and to issue the certificate to the State Board of Con-
trol provided for under subdivision 3 of section 3669 of the
Political Code, stating the amount of said credit. Petitioners
further pray, upon a hearing after the return on said alter-
native writ, that the writ be made peremptory. The alter-
native writ was issued and regularly served upon the respond-
ent. The return of respondent to the writ is a demurrer
thereto on the ground that the petition does not state facts
sufficient to constitute a cause of action or any ground for
relief.

Petitioner Southern California Edison Company, Ltd.,
hereinafter referred to as ‘‘Edison Company’’, is engaged in
the business of generating and distributing electric energy
as a public utility. A part of its generating system, known
as the Big Creek project, is located in the mountains of
Fresno County. Petitioner San Joaquin and Eastern Rail-
road Company, hereinafter referred to as ‘‘Railroad Com-
pany’’, was originally organized at the instigation of Pacific
Light and Power Corporation, Edison Company’s predecessor
in the ownership of the Big Creek project, for the purpose
of building and operating a short-line railroad between El
Prado and Big Creek, Fresno County, California, to be used
in constructing, maintaining and operating the Big Creek
hydroelectric plants. At the time Edison Company ac-
quired the Big’ Creek project in 1917, it also acquired the
ownership of all the stock of the Railroad Company, and
since that time has operated the railroad through its sub-
sidiary, the Railroad Company, as a necéssary adjunct to the
maintenance and operation of the Big Creek project. The

SS:
railroad system has also at all times been operated as a
common carrier, and during the past few years the Railroad
Company has also operated in connection with its railroad
system the highway transportation system between Fresno
and Huntington Lake, which is a part of the Big Creek
project. This highway transportation system, like the rail-
road system, has been operated as a common carrier, and also
for the transportation of freight and express used by the
Edison Company in the maintenance and operation of the
Big Creck project.

Respondent board, in computing state taxes against the
operative properties of petitioners for the fiscal year 1920-
1921, included as part of the gross receipts of the Railroad
Company, upon which its tax is based, charges made by the
Railroad Company for transportation of materials and sup-
plies for the Edison Company at the regular filed rates of
the Railroad Company. Subsequent thereto, petitioners re-
quested of respondent board an allowance for credit on the
next taxes coming due, on the theory that the charges made
by the Railroad Company against the Edison Company,
which charges are hereinafter referred to as ‘‘inter-company
revenue’’, should not have been included in the gross receipts
of the Railroad Company on which the tax was computed.
This application for credit was duly allowed by the board,
and thereafter, in following years, and up to and including
the tax computed for the fiscal year 1931-1932, the board
followed this method of computing the petitioners’ taxes, on
the theory that under the law the inter-company revenue
should be excluded from the gross receipts.

In computing petitioners’ taxes for the fiscal year 1932-
1938, respondent board departed from its previous interpreta-
tion of the law, and included in the gross receipts of the Rail-
road Company, inter-company revenue derived by the railroad
from carrying materials and supplies as freight and express
for the Edison Company in connection with the operation
and maintenance of the Big Creck project. This method of
computing the taxes has resulted in an increase over what it
would have been if computed by the old method of $448.86
on the railroad system, and of $474.22 on the highway trans-
portation system. At the same time respondent board
assessed taxes against all the operative properties of Edison
Company used by it in the generation and transmission of

2.

electric energy in the amount of $2,997,136.26 for the fiscal
year 1932-1933.

The first half of the tax thus assessed on the Railroad
Company’s property has been paid by petitioners under pro-
test, and after making this payment petitioners filed with the
board a claim for credit on the next taxes to become due

- from them after the allowance of such claim on account of
the alleged erroncous method followed by the board in com-
puting the taxes against the railway system and the high-
way transportation system of the Railroad Company. These
claims are for $224.42 on account of the overpayment of
taxes upon the railroad system and for $237.11 on account of
the overpayment of taxes on the highway transportation sys-
tem. These claims the respondent board duly denied on the
ground that the inter-company revenue should be included
as a part of the gross receipts upon which such taxes are
eomputed.

Subdivision 8 of section 3669 of the Political Code pro-
vides that whenever any taxes, paid to the state treasurer,
shall have been paid more than once, or shall have been
erroneously or illegally collected, or shall have been com-
puted contrary to law, the State Board of Equalization shall
certify to the State Board of Control the amount of said taxes
collected in excess of what was legally due, from whom they
were collected or by whom paid, and if approved by said
board of control, the same shall be eredited to the person
or company to whom it rightfully belongs, at the time of the
next payment of taxes.

It is the contention of petitioners that the two amounts of
$224.42 and $237.11, aggregating the sum of $461.53, were
erroneously collected from them as taxes for the fiscal year
1932-1933, This claim is based upon the fact that the
amount paid by the Edison Company to the Railroad Com-
pany during said year for the transportation of materials
and supplies as freight and express in connection with the
operation and maintenance of its light and power enterprise
—referred to above as inter-company business—should not be
included as a part of the gross receipts of the Railroad Com-
pany. | | There seems to be no question that the Railroad
Company is but a subsidiary company of the Edison Com-
pany, the latter company being the legal owner of all the
stock of the former. In such a case its gross receipts are

Ss

computed as a part of the gross proceeds of the Edison Com-
pany. (San Francisco-Oakland T. Rys. v. Johnson, 210 Cal.
188, 154, 155 [291 Pac. 197}].) Therefore, petitioners con-
tend that when the Edison Company paid the Railroad Com-
pany freight and express charges for carrying its own com-
modities, it was in reality paying these charges to itself and
that such receipts by the Railroad Company should not be
considered in computing its gross receipts. This contention,
we think, must be sustained. By section 14 of article XIII
of the Constitution the taxes levied against the property of
certain corporations therein named, including power com-
panies and railroads, are computed upon their gross receipts
from the operation of said companies for the calendar year
next prior to said levy. Under the decisions of this court as
noted above, when one company is a subsidiary of the other,
the taxes are computed upon the total gross receipts of the
combined companies. But such receipts must be actual re-
eeipts, and not revenue only fictitiously or theoretically
received. In the present proceeding it appears that the
subsidiary company actually received no revenue or other
remuneration whatever from the parent company for carry-
ing materials and supplies as freight and express over its
railroad lines. There was, therefore, no gross receipts, nor
any receipts whatever from this branch of its business. For
reasons of its own, the Edison Company, or parent company,
kept the accounts of its subsidiary company separated from
its own and charged itself upon the books of the subsidiary
company for all freight and express shipped by it over the
lines of said company. These charges were offset by other
entries purporting to show their payment. But no money
or cash whatever passed from the parent company to the
subsidiary company in any of these transactions. They,
therefore, represented no receipts upon which a tax might
be computed.

In State v. Minnesota & International Ry. Co., 106 Minn.
176 [118 N. W. 679, 16 Ann. Cas. 426], the Supreme Court
of Minnesota, in passing upon the question as to what are
gross receipts under the taxation system of that state, ruled
as follows: “‘Items 16 and 17 amounting to about $3,500
are claimed by the state as gross earnings upon the theory
that the company occupied the position of shipper when it
transported its own supplies and materials over its own

Ss

lines in the state of Minnesota. The company could not be
required to pay itself for carrying its own materials, and it
should not be charged with the amount which it would have
received had the materials been shipped by other companies.
The law does not refer to benefits or privileges of this char-
acter.’’? Our own court has also given expression to a similar
statement of the law (Payne v. Richardson, 189 Cal. 103, 104
[207 Pace. 547]), where the court held that, ‘‘The rule is
well settled that the carrier’s own transportation should not
be considered in estimating the gross receipts of the rail-
road.’’ (Citing case.) While these cases did not involve
revenue of a subsidiary company for services rendered by the
parent company, we can perceive no reason why the rule
should be any different when applied to inter-company
revenue.

TM it was the duty, therefore, of the respondent, in
determining the gross receipts of the Edison Company, to
include therein only the revenue actually received by the
Railroad Company from the operation of its railway and
highway transportation systems, and to exclude from such
gross receipts all revenue purporting to have been paid
(but no part of which was actually paid) by the Edison
Company to its subsidiary corporation, the Railroad Com-
pany, for services rendered in carrying freight and express
over the lines of its subsidiary company. The method, there-
fore, pursued by the respondent during the years prior to
the fiscal year 1931-1932 of allowing petitioner credit for
this ‘‘inter-company revenue’’ on its taxes coming due the
following year was not in variance with any requirement of
said section of the Constitution under which said taxes were
levied and collected, but was in strict compliance with the
provisions of subdivision 3 of section 3669 of the Political
Code. There is nothing contrary to this interpretation of the
law to be found in the case of Pacific Gas & Elec. Co. v.
Roberts, 176 Cal. 183 [167 Pac. 845]. In that case the
plaintiff sued to recover certain taxes, which it claimed were
illegally assessed against it for the fiscal year beginning July
1, 1911. <A portion of these taxes were computed upon the
gross earnings of the Suburban Light & Power Company for
the year 1910. During that year the Suburban Company
was operated as an independent company, but between
January 1, 1911, and March 1, 1911, the Pacific Gas and

Se

Electrie Company acquired the properties of the Suburban
Company and operated the same as a subsidiary company
for the year 1911. During the year 1910, while the Subur-
ban Company was being operated as an independent com-
pany, the Pacific Gas and Electric Company sold to it large
quantities of gas and electricity at a cost of $52,717.99. The
total gross receipts of the Suburban Company for that year
were $188,401.60, and plaintiff contended in said action that
this sum of $52,717.99 should be deducted from the sum of
$188,401.60, and that the difference between these two
amounts would represent the gross receipts of the Suburban
Company for the year 1910. The court held that no such
deduction should be made. It will be noted that that case
did not involve in any manner whatever so-called ‘‘inter-
company revenue’’, as the gross receipts therein involved,
and all receipts of both companies which the court then had
under consideration, were receipts from the properties of
said companies during the year 1910, when each company
was owned and operated independently of the other, and be-
fore the Pacific Gas and Hlectric Company had purchased
the properties of the Suburban Company. It is true that
in our former decision in this case we held that it was deci-
sive of the questions involved in the instant case. But our
holding was predicated upon a misconception of the facts
in that case. At the former hearing it was contended by
respondent that the Suburban Company, during the year
1910, and at the time when it purchased from the Pacific
Gas and Electric Company gas and electricity at a cost of
$52,717.99, was being operated by the plaintiff, the Pacific
Gas and Electric Company, as a subsidiary company, and,
therefore, whatever receipts came to it from the Suburban
Company were simply theoretical receipts from the sub-
sidiary to the parent corporation, or in other words, ‘‘inter-
company revenue’, A closer study of the decision in the
Roberts case, with the aid of the record and briefs therein,
makes clear the fact that the Suburban Company was ope-
rated during the year 1910, as an independent company, and
that the question of ‘‘inter-company revenue’ was not in-
volved therein. The Roberts case is, therefore, distinguish-
able from the instant case, and as correctly understood it is
not decisive of any question involved herein.

2

HH In view of what we have said, it is apparent that
there is no merit in the contention of respondent that certain
provisions of section 3665¢ of the Political Code are at vari-
ance with section 14 of article XIII of the Constitution, and
are for that reason ineffective. This section provides for
the filing with the State Board of Equalization of annual
reports by those companies whose property is subject to state
taxation. These reports are required to show the gross
receipts of the company and any other information the State
Board of Equalization may deem necessary in order to enable
it to levy the taxes provided for in section 14, article XIII,
of the Constitution. The provisions of this section to which
the respondent makes objection are found in subdivision 11
of said section 3665c, and they provide that each such com-
pany shall include in its annual report to the Board of
Equalization the property and business of all subsidiary
companies and that no separate report need be rendered by a
subsidiary company whose property, franchise and operations
are fully covered by the report of the operating company,
unless the Board of Equalization shall deem a separate report
necessary. In this section of the code a subsidiary company
is defined and, as so defined, there can be no question but
that the Railroad Company herein involved is a subsidiary
company of the Edison Company. While this section does
not expressly provide that the Board of Equalization shall
eliminate ‘‘inter-company revenue’ from the gross receipts
of the parent company, it at least requires information in the
annual reports which will enable the board to do just that
thing. It may be inferred from the language of the section
that the legislature intended that the Board of Equalization
should follow such a procedure. But this section does not
attempt to confer any such power upon the Board of Equali-
zation. The Constitution fixes the basis of computing the
taxes to be paid by such corporations and that basis is, as we
have seen, the gross receipts of each such corporation. But,
as held above, the gross receipts of a company are limited
to its actual revenue and do not include fictitious or theoret-
ical receipts which are mere matters of bookkeeping only and
which have in fact no real existence. Had section 3665¢ of
the Political Code expressly empowered the Board of Equali-
zation to eliminate such fictitious items in computing the
amount of gross receipts of such companies, it could not for

ee 429

that reason be held to be unconstitutional. In that case, it

would only have expressly directed the Board of Equaliza-

tion to do that which the Constitution had impliedly author-

ized to be done. It follows that section 3665¢ as now in

force cannot be held to be in variance with the Constitution.
Let the writ of mandate issue as prayed for.

Preston, J., Langdon, J., Waste, ©. J., and Shenk, J., con-
eurred.

[Sac. No. 4618. In Bank.—March 30, 1934.]

M. MONIZ et al, Respondents, v. ALVA PETERMAN,
Appellant.

8

W. T. Belieu for Appellant.

H. W. McGowan for Respondents,

CURTIS, J.—Action to quiet title to a 40-acre tract of
land in Glenn County, upon which a pumping plant and
well are situated. In 1908, the plaintiff Moniz and one
Pimental, predecessor in interest of defendant Peterman,
and one Fulton, as partners in a dairy business in Glenn
County, purchased a tract of land consisting of 130 acres
from David Hughes, situated in the north half of section 3,
township 19 north, range 3 west, M.D. B. & M. It was

i Pe 431

agreed between the parties that Fulton should take the east
50 acres, Moniz the plaintiff, should take 40 acres adjoining
Fulton’s on the west, and Pimental the 40 acres adjoining
Moniz’ tract on the west. A survey was made for Hughes
by one T. L. Knock, a licensed surveyor, which survey was
known as the ‘‘Map of the Hughes Tract’’, and a fence
which connected the stakes put in by Knock to mark the
northwest and southwest corners of Moniz’ land and the
northeast and southeast corners of Pimental’s land, was
jointly constructed between Moniz’ land and Pimental’s
land by them. Moniz and Pimental shared the expense of
constructing said fence. In the northwest corner of Moniz’
land, the three partners dug a well and installed a pump
and engine to be used in common by them. Subsequently
Pimental and Fulton sold their land, and it is the claim of
plaintiffs that at the time of the sale of their property,
plaintiff Moniz paid them for their part or interest in the
well. No question ever arose until the present controversy
as to the ownership of this well and the land upon which it
was located from the time the well was dug and the pump
installed in 1908, but the respective owners on each side
of the fence during all the intervening years used the prop-
erty up to the fence line. In August, 1921, Alvarez ac-
quired his interest in the Moniz tract. In 1927, by mesne
conveyances, the defendant Peterman became the owner of
the 40-acre tract formerly owned by Pimental. In 1930,
defendant Peterman had a survey made of his property by
one Thomas. According to this survey the boundary line
between his land and the land of the adjoining owners,
Moniz and Alvarez, lay some 18 feet to the east of the
fence between the two tracts of land, and the pumping plant
and well, instead of being on the northwest corner of plain-
tiffs’ property, was situated on the northeast corner of de-
fendant’s.. Defendant thereupon erected a fence upon the
line located by the recent survey to the east of the well and
pumping plant, thereby inclosing it and preventing the
plaintiff Alvarez from using any water from the well. This
action was then commenced by the plaintiffs to quiet title
to their 40-acre tract which, according to their contention, is
bounded on the west by the line marked by the fence erected
by Moniz and Pimental at the time of the purchase of the
180-acre tract of land in 1908. The original deeds from

432 Le |

Hughes to Moniz and Pimental set forth the description of
their respective tracts by metes and bounds and described
the 40-aere tract deeded to Moniz as beginning at a point
in the section line between section 3, township 19 north, and
section 34, township 20 north, range 3 west, M. D. B. & M.
2820 feet east of the common corner for sections 3 and 4,
township 19 north, and sections 33 and 84, township 20
north, range 3 west, M. D. B. & M. and described the 40-acre
tract deeded to Pimental as beginning at a point in the sec-
tion line between section 8, township 19 north, and section
34, township 20 north, range 3 west, M. D. B. & M. 2150
feet east of the common corner for sections 8 and 4, town-
ship 19 north, and sections 38 and 34, township 20 north,
range 3 west, M. D. B. & M. The dispute between the
adjoining owners arises from the lack of knowledge as
to the true location of the initial starting point for the
two descriptions, the plaintiffs claiming that the dommon
section corner from which the description in the deeds
starts is from 41 to 44 feet west of the center line of the
Southern Pacific right of way, and the defendant claiming
it to be 26.2 feet west of said right of way. If defendant
be correct, the eastern boundary of his tract of land would
be some 18 feet east of the boundary marked by the fence
built by Moniz and Pimental in 1908. The trial court up-
held plaintiff’s contention that the location of the initial
starting point was 44 feet west of the center line of the
Southern Pacific right of way, thereby including the dis-
puted strip of some 18 feet within the boundary and de-
scription of plaintiffs’ deed, and made a further finding
to the effect that the line as marked by the fence built in
1908 was the agreed and established boundary line. Judg-
ment for the plaintiffs quieting their title to the 40-acre
tract, and for the sum of $272.50 as damages for the depri-
vation of the use of the well was made and entered. From
said judgment, defendant appeals.

There is no merit in the appeal. The finding of the
trial court with reference to the initial starting point is
supported by the evidence. The question of the location of
the common corner section which was the initial starting
point for the description of plaintiffs’ and defendant’s deeds
was gone into thoroughly by both sides. Mr. Russell, a
surveyor called by the plaintifis, testified that by measuring

SS 438

2,820 feet west from the northwest corner of plaintiffs’ prop-
erty he arrived at a point 45 feet from the center of the
Southern Pacific right of way, that he was unable to find
any monument there, but by prolonging a straight line
north through the southwest corner of said section 3 and
through another known section corner one mile to the south
of the latter section corner, he arrived at the exact inter-
section marked by his measurements from the northwest
corner of plaintiffs’ property, thus indicating that the point
45 feet west of the railroad right of way was the true sec-
tion corner. Bayard Knock, who had been county surveyor
of Glenn County for some fifteen years and had made
numerous surveys all through that particular township, and
who was a son of T. L. Knock who had made the original
survey of the property here for David Hughes, testified
from his general knowledge of the section corners north and
south of said corner, that said corner was 44 or 45 feet
west of the center line of the Southern Pacific right of way.
He further testified with reference to known section corners
both directly north and south of the corner in dispute, giving
the exact location in each instance, and stated that all of
them were from 41 feet to 46 feet west of the center line of
the railroad right of way. He testified that he believed the
section corner was approximately 45 feet west of the center
line of the railroad right of way because ‘“‘it bears out a
general alignment with all the others there, and I cannot
see why with the whole alignment running 40 odd feet that
that should only be twenty-six’. Ryan, a licensed surveyor,
testified from the field-notes of T. L. Knock, deceased, of his
survey of the Hughes tract, being the original and identical
survey made by him for Hughes at the time of the sale of
the 180-acre tract to Moniz, Pimental, and Fulton in 1908,
that T. L. Knock had established the section corner here in
dispute about 41 feet west of the center line of the railroad
right of way. Bayard Knock likewise so interpreted these
field-notes of his father. The map of the Hughes subdivi-
sion was also received in evidence. It cannot be said, as
claimed by appellant, that a finding based upon the above
testimony, locating the disputed point at 44 feet west of
the center line of the railroad right of way, was ‘‘contrary
to all the evidence and wholly unsupported’’.
P|

434 De 7

HH Appellant at the trial attempted to prove his conten-
tion by showing that there was an iron pipe in the ground
located at the point claimed by him to be the common section
corner, that is to say, 26.2 feet west of the center line of the
railroad right of way. It is admitted that there was an iron
pipe there, but there is no direct evidence establishing when
the pipe was so located, or that it was a government loca-
tion of the section corner. Appellant cites section 2077, sub-
division 2, of the Code of Civil Procedure, which provides
that, ‘‘when permanent and visible or ascertainable bound-
aries or monuments are inconsistent with the measurement,
either of lines, angles, or surfaces, the boundaries or monu-
ments are paramount’’, as requiring that such monument be
held to be the common section corner. It will be noted,
however, that the original government field-notes were not
available and appellant in his own brief states that, ‘‘it
stands as an admitted fact in the case that there was no
established or known government corner common to the
four sections’”’. The testimony of Thomas, the licensed sur-
veyor, who made the survey upon which appellant bases his
claim to the 18 feet of land and the well situated thereon,
that in several maps or adjoining tracts of lands, the iron
pipe had been accepted as the section corner by the sur-
veyors making the respective surveys, while persuasive, is
not conclusive. As was said in Golden v. City of Vallejo,
41 Cal. App. 113 [182 Pac. 347], in answer to a similar argu-
ment that by virtue of code section 2077, subdivision 2 of
the Code of Civil Procedure, the known monument must con-
trol, ‘‘the application of the rule presupposes that the monu-
ment was placed by the government surveyors to mark the
corner. But that was not established and the court in view
of the evidence was justified in rejecting that theory.’? In-
asmuch as neither side could with certainty establish the
disputed section corner, the decision of the trial court neces-
sarily rested upon a weighing of probabilities. We have set
forth generally the evidence offered by each side. It will
serve no purpose for us to balance the facts adduced one
against the other and weigh the testimony of the various
witnesses upon this phase of the case. That was the prov-
ince of the trial court. It has done so and decided in favor
of the respondents. Under the familiar rule relative to a

Pa 435

conflict in evidence, the conclusion of the trial court will
not be disturbed on appeal.

Hl But in no event, even if it be conceded for the sake
of argument that the evidence relative to the location of the
initial starting point of the Hughes survey preponderated
in favor of the appellant, would appellant be entitled to a
reversal of the judgment. The finding of the trial court
that the fence jointly constructed by Moniz and Pimental
in 1908, constituted an agreed and established boundary is
amply supported by the evidence. Both Moniz and Pimen-
tal testified that a survey had been made by T. L. Knock
in order to properly subdivide the 180-acre tract, and that
they jointly constructed the fence, starting at the stakes
located by the survey, with the understanding that such
fence was and would be the boundary line of their respec-
tive tracts. And there is not the slightest doubt that from
the time of the construction of the fence in 1908, until ap-
pellant moved the fence over in 1930, the respective owners
on each side of the fence acquiesced in the fence as the true
boundary line of their properties. This is expressly ad-
mitted by appellant in his brief. Appellant, however, insists
that ‘‘mere acquiescence’? is not sufficient to sustain the find-
ing, and that in the absence of proof of a dispute or uncer-
tainty with reference to the boundary line and an agreement
between the parties, the finding must fall. But it is settled
that no dispute in the sense of a quarrel or ill-feeling be-
tween the parties is necessary. (Price v. De Reyes, 161 Cal.
484, 489 [119 Pac. 893].) [J And there is no doubt that
the boundary was uncertain for this is demonstrated by the
fact that it was necessary to employ a surveyor to divide
the entire tract and fix and definitely establish the boundary
line. Neither is an express agreement in writing or parol
necessary. A tacit agreement to regard the fence as the
true boundary line is sufficient and this may be inferred
or implied from the conduct of the parties. (Raney v. Mer-
ritt, 73 Cal. App. 244 [238 Pac. 767] ; Vowinckel v. N. Clark
& Sons, 217 Cal. 258, 260 [18 Pae. (2d) 58].)

It is, of course, true that the acquiescence must consist in
acquiescence in the fence as a boundary line and not mere
acquiescence in the existence of the fence as a barrier. Thus
in Staniford v. Trombly, 181 Cal. 373 [186 Pac. 599], the
court reversed the judgment, holding that the evidence

436 a —

therein showed that the builders of the fence fixed the line
“‘for occupancy and not for title’’. It was also so held in
Grant Pass Land & Water Co. v. Brown, 168 Cal. 456 [148
Pac. 754], where it was shown, as in Staniford v. Trombly,
supra, that the fence had been built to turn cattle and not
to establish a boundary line. And it is, of course, well
settled by a long line of authorities that if the true location
of the boundary line is known by both the parties, or one
of them, but nevertheless another and different line is agreed
upon or acquiesced in as the boundary line, acquiescence in
such line even for a long period of time will not suffice to
establish such line as the true boundary line. (Clapp v.
Churchill, 164 Cal. 741 [1380 Pac. 1061]; Lewis v.-Ogram,
149 Cal. 505 [87 Pac. 60, 117 Am. St. Rep. 151,101. RB. A.
(N. 8.) 610]; Mann v. Mann, 152 Cal. 28 [91 Pac. 994];
Nathan v. Dierssen, 184 Cal. 282 [66 Pac. 485]; Cosgrave
y. Donovan, 52 Cal. App. 625 [199 Pac. 808, 810].) But
neither would an express agreement. This is so because if
the true location of the line be certain, an agreement plac-
ing it somewhere else could not be enforced, for the agree-
ment, if oral, would be void as constituting an attempt to
transfer land without writing (sec. 1091, Civ. Code) and
the agreement, if written, would be ineffectual to pass title
as it would lack the apt words of conveyance necessary to
accomplish a transfer of real property. (Lewis v. Ogram,
supra.) Most of the cases cited and relied upon by appel-
lant belong to this category, and obviously the language in
such cases setting forth the rules and requirements appli-
cable to the situation where the boundary is in fact-known
but the parties agree upon another and different line as the
boundary, have no application to the situation pictured here,
where the boundary line (as is contended by appellant) was
not the true boundary line, but was in good faith through
a mistaken belief in the correctness of the original survey
accepted as such by both parties. No good reason exists
why the same rules should not apply where the coterminous
owners honestly believe that a certain line marks the true
boundary line and build a fence thereon with the under-
standing that it shall mark and measure their properties, as
are applied where the owners do not know where the bound-
ary line is and being uncertain, by agreement establish a line
as the boundary. It has been so held. (Dundas v. Lanker-

a Le 437

shim School Dist., 155 Cal. 692 [102 Pac, 925]; Silva v. Aze-
vedo, 178 Cal. 495 [173 Pac. 929]; Nusbickel v. Stevens
Ranch Co., 187 Cal. 15 [200 Pac. 651]; Vowinckel v.
N. Clark & Sons, 217 Cal. 258 [18 Pac. (2d) 58].)

In the case of Silva v. Azevedo, supra, Azevedo deeded to
Silva part of a tract of land purchased by him, the land
granted being described in the deed by metes and bounds.
Before the execution of the deed the entire tract had not
been divided, nor had the boundary line between the east
and west halves been marked upon the ground. Azevedo
and Silva, acting jointly, employed a surveyor to survey
the tract, to divide the same into halves, and to furnish a
particular description by metes and bounds. The surveyor
made the survey and established a line of stakes upon the
ground but by mistake located these stakes too far to the
east. The two joined in building a substantial fence on
the line marked by the stakes, believing such line to be the
true line called for by the deed. The court said: ‘“‘On this
state of facts, we think there was no room for any other
inference than that the line indicated by the surveyor as the
dividing line between the two holdings, and followed by
the erection of a fence by the two parties, was agreed on
by them as the true boundary . .. That Silva and Azevedo
were, in fact, in doubt as to the place where the dividing
line should run is apparent from the circumstances, and
from their conduct.... That the parties thought they
needed the assistance of someone possessing the requisite
ability is conclusively shown by their employment of a sur-
veyor to locate and mark the division line between the two
halves of the larger tract. The only purpose they could
have had in so doing was to fix definitely, by proper measure-
ment and marking, the boundary, which, until it was so
ascertained and marked, must have remained uncertain in
their minds. When, then, acting upon the information so
given them, they joined in the construction of a substantial
fence on the line, and proceeded, respectively, to improve
and cultivate up to the fence, the only theory upon which
their acts can be reasonably explained is that they had
agreed upon the fence line as the true location of the west
boundary of the land conveyed to Silva. It is true that both
were mistaken in believing that the line so fixed was the
true line. But this does not prevent the application, of ‘the

438 es 7

rule.’”’ It is true that doubt is thrown upon this conclusion
by the case of Huddart v. McGirk, 186 Cal. 386 [199 Pac.
494], but since the decision of that case, both the case of
Nusbickel v. Stevens Ranch Co., supra, and Vowinckel v.
N. Clark & Sons, supra, have been decided by this court.
In the Nusbickel ease, the case of Silva v. Azevedo, supra, is
cited as an authority, and in the Vowinckel case, it is quoted
from with approval. The facts in the Nusbickel case and the
Vowinckel case are similar to the facts in the instant case,
and are decisive of the question here involved.

HE Appellant complains that the finding relative to the
agreed boundary line is not within the issues of the amended
complaint to quiet title. The first count contained the usual
averments of ownership and possession of the property in
controversy. We are of the opinion that under these general
allegations, the issue of an agreed boundary line may be
proved. ‘‘One averring himself to be the owner in fee, may
prove title by adverse possession, or indeed any title, however
aequired.’? (22 Cal. Jur., p. 165.)

We are satisfied that not only are the findings of the lower
court supported by the evidence, but that the equities in the
ease are with respondents.

The judgment is affirmed.

Shenk, J., Waste, C. J., Langdon, J., Preston, J., and
Seawell, J., concurred.

[L. A. No. 18381, In Bank—March 80, 1934,]

EUGENE SWARZWALD et al., Appellants, v. HALLAM
COOLEY et al., Respondents.

Libby & Sherwin and Warren E. Libby for Appellant.

Victor Ford Collins, Walter Haas, Harold C. Johnston,
Vinetz & Gitelson, G. E. Terrin and Stanley F, Maurseth
for Respondents. _

PRESTON, J.—The record shows an action by plaintiffs
Swarzwald and a cross-action by defendant Cooley, both in
form to quiet title and to locate the oceanward extremity
of a common boundary line. The bank and the other de-
fendants are only nominally interested in the result of this
litigation, the former being the trustee and the latter bene-
ficiaries under a real estate subdivision trust, of which the
lands in question are a part.

The controlling question is the true location of the com-
mon point in the line of ordinary high tide, or mean high
tide, of the Pacifie Ocean, which, in May and June, 1927,
marked the southerly terminus of the northwest boundary
Tine of lot 9 and the like terminus of the southeast boundary
line of lot 8, both situate in a subdivision of Laguna Beach

440 Le i,

lands in Orange County, California, officially designated as
Arch Palisades No. 2.

Description of these lots originates in the southwest
boundary line of the state coast highway. They are each
100 feet in width along this highway and the laterals are
uniform lines parallel to each other and perpendicular to
said highway line, terminating in said mean high-tide line,
or ordinary high-tide line, of the ocean. After meeting said
tide line, lot 8 extends in the shape of a tongue or promon-
tory several hundred feet farther into deep water. The
two lots are a part of some 17 lots in said subdivision, all of
which originate at said highway line, have fairly uniform
side lines and in a similar manner meet said tide line as
their southerly boundary. Lot 17 is similarly situated, with
respect to the said promontory feature, to lot 8. Although
a regular subdivision map of said tract was filed in the
office of the county recorder of said Orange County on
March 26, 1927, these lots were conveyed by a metes and
bounds description on a survey presumably made about
November 15, 1926. .

The contention of respondent Cooley (defendant and
eross-complainant), who prevailed in the court below, is that
the northwest boundary of lot 9 is a line exactly 3876 feet
long, extending from the point of beginning on a course
south 59 degrees 21 minutes 30 seconds west from said point
of beginning. The contention of appellants Swarzwald
(plaintiffs and ecross-defendants) is that said line termi-
nates, not at 376 feet, but at 592 feet along the same course
from the point of beginning, or at least that it is 80 feet
longer than 876 feet, which would terminate it where the
irregular shape of lot 8 juts athwart its course.

The casus belli is the existence of a sandy beach in front
of these lots and principally in front of lot 9, between the
toe of the bluff line and the line of mean high tide. The
court below made findings and gave its decree favoring
the contention of Cooley and plaintiffs appealed upon a
full record. | | The court made two important findings
of fact, as follows: (1) That the southeasterly boundary of
said lot 9 terminated at the line of ordinary high tide as of
May 9 or June 10, 1927, at exactly 382 feet along a line
perpendicular to said highway and that its northwest bound-
ary line terminated at exactly 876 feet from the point of

ee aaa

beginning of said lot, along a line whose course was south
59 degrees 21 minutes 30 seconds west. (2) That no accre-
tion had gathered in front of said lots between November
15, 1926, and June 10, 1927, but that such accretions had
occurred between June 10, 1927, and November 22 or De-
cember 28, 1928; and further that the ancient or original
mean high-tide line, at said point 876 fect from the point
of beginning of the northwest boundary of lot 9 and the
northeast boundary of lot 8, was circular in character; pre-
sumably said ancient high-tide line was found to be exactly
circular or so nearly so that for practical purposes it could
be so treated.

Pursuant to the latter finding the court, on its own mo-
tion, appointed an expert who proceeded to measure said
original are in said shore line at the point where it met
said common boundary between these lots and to there con-
struct a tangent to same, followed by projecting a perpen-
dicular line to said tangent until it met the present line of
mean high tide. The court adopted the result of this effort
of the expert and declared that a line projected in said
manner was the equitable division line fixing the rights of
the parties in and to said accreted lands. The course of
this line was south 12 degrees 0 minutes west from said
terminus. The effect of said action was to vary the boundary
line between said lots in excess of 47 degrees from its last
and final course and, to that extent, cause it to pass in
front of lot 9. A line so constructed would in effect place
a large part of the accreted land belonging to lot 8 promi-
nently in front of lot 9.

We have reached the conclusion that the learned trial
court fell into prejudicial error in both of the above find-
ings. Treating them in the order stated, we can discover
no sufficient evidence to justify the finding that the line of
mean high tide would be exactly 376 feet on the northwest
boundary or 382 feet on the southwest boundary of lot 9.
The official map was conclusively shown to be inaccurate as
to the location of the tide line and, in this behalf, it was
entirely disregarded by the expert appointed by the court.
The map, too, was off scale as much as 40 to 50 feet in some
of its boundaries and the expert appointed by the court
thought that the line here in dispute had that percentage of
error on the map. Even taking the map as accurate, it

442 —— 7

does not purport to measure said distance either at 376
feet to the one point or 382 feet to the other. The measure-
ments are given as exact only to the ocean bluff and the
measurements from that point to the line of ordinary or mean
high tide are only approximations. The engineer who made
the survey was examined as a witness and his field-notes
were placed in the record. He frankly admitted that the
measurements, as the notes show, were only approximations
from the bluff line to the tide linc. In fact, he said that
they were estimates made with the eye only, said observations
being made from the top of the bluff overlooking the ocean.
No measurements with chains or instruments were made
and there was no effort to locate the tide line as of that
day in any manner whatsoever. As already noted, this
survey was as of November 15, 1926. These parties made
their purchases in said subdivision in May and June, 1927.
The court found that the line of ordinary high tide had not
changed during this period. Yet the survey of one Peabody,
made December 22, 1928, indicates that said line of ordinary
high tide met the northwest boundary of lot 9 at a distance
of approximately 415 feet from the point of beginning, or
some 39 feet beyond the point found by the court as of
June, 1927. It is strange that no sand or alluvium was
deposited in the first year and that much was deposited in
the second. Plaintiffs’ witnesses fixed this line, by a survey
made November 22, 1928, at 592 feet from point of begin-
ning. Moreover, the pleadings admit that said line was in
excess of 376 feet in length when this action was instituted
on March 1, 1929. We are, therefore, utterly unable to
find any evidence that even tends to support the finding in
question or, in fact, any finding as to the location of said
tide line previous to the fall of 1928.

Secondly, if the point where the court erected the are,
tangent and perpendicular does not correctly designate the
southerly terminus of the northwest boundary of lot 9, it
follows as of course that the whole superstructure, built on
the assumption that the point is properly located, must fall.
Moreover, the method employed by the expert in establishing
this are seems entirely unreliable. He assumed the north-
west boundary line to terminate at 876 feet and the south-
east boundary line at 382 feet. He then set his instrument
at a point marking 376 feet and, with the naked eye, viewed

SS 443

the ocean bluff as it then appeared to him; then by using
his judgment, he projected the are found by the court. No
point on the ancient shore line at any place, either north-
west or southwest of said 376 foot point, was located, nor
was any effort made by the use of any such point to estab-
lish a mean curve to mark the ancient shore line nor to
project a tangent and perpendicular thereto at said point
when located.

Hi We, therefore, conclude that the mean high-tide line,
as of May or June, 1927, was a natural monument, fixing
the southerly boundary of all these lots and that no suffi-
cient evidence whatsoever can be found in the record to
establish the said line as of that date, if indeed any change
at all has occurred in it since then. We further hold that
said natural monument will control the measurement found
in the contracts and conveyances made.

We are asked to interpret the case of Fraser’s etc.
P. Co. v. Ocean Park P. Co., 185 Cal. 464 [197 Pae. 328,
198 Pac. 212], and set up a proper formula for the division
of accreted lands at a point such as the one in question. It
will be noted that here the latest surveys before us are the
ones made in November and December, 1928, now more than’
five years ago. But inasmuch as both parties seem to con-
cede that probably there may be accretions existing which
this property abuts, we feel impelled to say that we inter-
pret the above case as setting forth the general rule of the
common law by which accretions are to be subdivided.
The court there said: ‘‘If accretions occur in front of the
land the boundary line between them as to such accretions
is a line extending into the water perpendicular to the
original shore line in its general course and not by the line
of the boundary extended in its original direction. If this
were not the case it will be seen that where the boundary
line strikes the shore line at an acute angle the rights of
one proprietor would extend in front of the land of the
other so as to practically cut him off from the use of the
water. The authorities are all to the effect that this is not
the case. (8 Farnham on Waters, pp. 2476, 2477; Menasha
etc. Co. v. Lawson, 70 Wis. 600 [86 Wis. 412]; People v.
Schermerhorn, 19 Barb. [N. Y.] 540.)??

This rule follows closely the case of Inhabitants of Deer-
field v. Pliny Arms, 17 Pick. (84 Mass. 41) [28 Am. Dee.

44 es —

276], where the court said: ‘‘The rule is, 1. To measure the
whole extent of the ancient bank or line of the river, and
compute how many rods, yards or feet, each riparian pro-
prictor owned on the river line. 2. The next step is, sup-~
posing the former line, for instance, to amount to 200 rods,
to divide the newly formed bank or river line into 200
equal parts, and appropriate to each proprietor as many
portions of this new river line, as he owned rods on the old.
Then, to complete the division, lines are to be drawn from
the points at which the proprietors respectively bounded on
the old, to the points thus determined as the points of
division on the newly formed shore. The new lines, thus
formed, it is obvious, will be either parallel, or divergent, or
convergent, according as the new shore line of the river
equals, or exceeds or falls short of the old.’’

This doctrine has, in turn, been confirmed by the United
States Supreme Court in the case of Johnston v. Jones, 1
Black (66 U. 8.) 209, 223 [17 L. Hd. 117].

But both of the above cases also recognize exceptions to
the general rule, as witness the following further language
from the Deerfield case, supra: “It may require modifica-
tion, perhaps, under particular circumstances. For in-
stance, in applying the rule to the ancient margin of the
river, to ascertain the extent of each proprietor’s title on
that margin, the gencral line ought to be taken, and not the
actual length of the line on that margin if it happens to be
elongated by deep indentations or sharp projections. In such
ease, it should be reduced by an equitable and judicious
estimate, to the general available line of the land upon the
river.”’

This latter exception was indorsed and applied in the
ease of Brown v. Spreckels, 18 Hawaii, 91, 103. The court
there held, under facts similar to those of the instant case,
that there was enough to justify a finding that the accretion
belonged to the land in front of which it was formed.

A general statement of the object to be accomplished by
subdivision of accretions is found in Allen v. Wood, 256
Mass. 843 [152 N. E. 617, 621], as follows: ‘‘The object of
apportioning accretions is that they shall be so apportioned
as to do justice to each owner, in the absence of a positive
prescribed rule and of direct judicial decision to guide, and
their division on a nonnavigable river frontage is so made

SS as

as to give each relatively the same proportion in his owner-
ship of the new river line that he had in the old.”

See, also, Brown v. Spreckels, supra, at page 103, where
the court said: ‘‘The correct and more general rule is that
the division of accretions should be equitable with a view to
giving each proprietor a fair portion of the accretions and
access to the water, in view of the contour and location of
the respective lands before the accretions were formed. For
instance, the general line of the shore would ordinarily be
taken and the relative lengths of frontage upon it irrespec-
tive of deep indentations and sharp projections.’’

There is nothing in the case of Fraser’s etc. P. Co. v.
Ocean Park P. Co., supra, at variance with these principles
or with the exceptions noted to the general rule. By use
of the phrases ‘‘at that point’? and ‘“‘at that place’’ the
court did not mean to limit its other pronouncement defining
the original line as the ‘‘general course’’ of the ‘‘original
shore line’. One point will not determine a line nor two
points an are. At least three points are necessary to de-
scribe an are. What is meant by the original general shore
line is the general course of the line marking the margin
of the properties as a whole and it is altogether possible
that to determine it in some cases it would be necessary to
consider points in the shore line nearby the particular
margin in question. And applying this observation to the
ease before us, it may be found advisable to consider the
whole marginal front from lot 8 to lot 17 to determine the
general course of the ancient shore line. In fact, the court,
on a reinvestigation of this case, may find it feasible to
merely project the parallel lines on all of these lots to
properly subdivide accretions between the several owners
of frontage.

The judgment is reversed with directions to proceed in
a manner not inconsistent with the conclusions above an-
nounced.

Waste, C. J., Curtis, J., Shenk, J., and Seawell, J., con-
curred. .

Rehearing denied.

446 ee =

[L. A. No, 14453, In Bank,—March 30, 1984.]

DONALD SNODGRASS, Respondent, v. HENRY W.
HAND et al., Appellants.

Edward J. Kelly for Appellants.

a 4a

Stickney & Stickney for Respondent.

WASTE, C. J.—Defendants appeal on the judgment-roll
from a judgment entered in favor of the plaintiff.

The action was instituted to recover money damages for
injuries incurred as the result of a collision between plain-
tiff’s bicycle and an automobile operated by the defendant
Henry W. Hand with the knowledge and consent of the
defendant-owner, Dora B. Hand, his wife. It is not con-
tended that the car at the time of the accident was being
operated by an agent of the owner or on the latter’s busi-
ness. This being so, the owner’s liability, if any, is limited
to $5,000 because of the provisions of section 171414 of
the Civil Code, which section provides in part that ‘‘Every
owner of a motor vehicle shall be liable and responsible
for the death of or injury to person or property resulting
from negligence in the operation of such motor vehicle, in
the business of such owner or otherwise, by any person
using or operating the same with the permission, express
or implied, of such owner provided that the liability of
an owner for imputed negligence imposed by this section
and not arising through the relationship of principal and
agent or master and servant shall be limited to the amount
of five thousand dollars for the death of or injury to
one person in any one accident.... ”’

The appeal being here on the judgment-roll alone it will
be presumed, on well-settled principles, that the trial court
properly and fully instructed the jury on the liability of
the respective defendants and particularly on the limited
liability of the defendant-owner. With these instructions
before it the jury brought in the following verdict: ‘‘We,
the jury in ihe above entitled cause, find in favor of plain-
tiff and against defendant Henry W. Hand [operator of the
ear] and fix plaintiff’s damages against said defendant, in
the sum of Five Thousand (5000) and jointly in favor
of plaintiff against defendant Dora B. Hand jointly with
Henry W. Hand and fix plaintiff’s damages against said
defendant, in the sum of Five Thousand Dollars ($5000.00).’’

HH The court below construed the verdict to be an award
of damages against the operator of the car, individually, in
the sum of $5,000 and an additional joint award of damages
against the operator and owner of the car in the further

44g Pe |

sum of $5,000. In other words, the trial court concluded
that the verdict constituted an award of damages against
the operator of the car in the sum of $10,000, for one-
half of which sum the owner of the car was to be jointly
liable. Judgment was accordingly entered.

Defendants now contend for the first time that the verdict
is so ambiguous and unintelligible as to be insufficient to
support any judgment. It is urged that the first part of
the verdict is clear and definite in its award of damages
in the sum of $5,000 against the operator of the car, in-
dividually, but that the second part of the verdict, wherein
damages in the sum of $5,000 is awarded against said
operator and the owner of the car, jointly, is uncertain in
that it cannot be determined therefrom whether the latter
award embraces the former.

We do not share this view. In our opinion the verdict
very definitely awards damages in the sum of $5,000 against
the operator, individually, and then proceeds to make a
second award, the two being joined by the conjunctive
“‘and”’, ‘‘jointly in favor of plaintiff against defendant
Dora B. Hand jointly with Henry W. Hand and fix plain-
tiff’s damages against said defendant, in the sum of Five
Thousand Dollars ($5000.00)’’. Had the jury intended but
a single award of $5,000, for which the defendants were
to be jointly liable, it would have been a simple mat-
ter to so state. To achieve such result there would have
been no necessity for employing a complicated form of
verdict divided into parts which respectively provide
for individual and joint liability. The mere form of
the verdict suggests to us that the jury intended to do
more than render a simple verdict for $5,000 against the
defendants jointly. [J Morcover, the appeal being on the
judgment-roll alone, it will be presumed that the trial court
correctly and properly instructed the jury on the law and
on the use and effect of the forms of verdict submitted to
them. It will also be presumed that the jury followed the
court’s instructions and that the verdict, in the light of
such instructions; was clear and intelligible to the trial
court. [J In construing a verdict reference may be had
to the pleadings, the evidence and the charge of the court.
(Sitterson v. Sitterson, 191 N. C. 319 [181 8. E. 641, 642,
51 A. L. R. 760]; Consolidated cic. Min. Co. v. Struthers, 41

a as 449

Mont. 565 [111 Pac. 152, 154].) Obviously, on an appeal
on the judgment-roll alone, an appellate court, being wholly
unfamiliar with the evidence and the charge to the jury,
is not placed at the point of view occupied by the trial
court when the latter construed the verdict. This being so,
it will be presumed that the lower court’s interpretation of
the verdict was reasonably warranted under the evidence
and instructions. Any and all reasonable inferences will be
indulged in to support rather than defeat the verdict and
judgment. (Johnson v. Visher, 96 Cal. 310, 313 [81 Pac.
106]; Ochoa v. McCush, 213 Cal. 426, 430 [2 Pac. (2d)
857].) The test is not whether an appellate court can under-
stand and construe the verdict on a record consisting solely
of the judgment-roll, but whether such record affirmatively
shows that the trial court’s interpretation is erroneous. We
cannot say on the record now before us that the trial court
erred in construing the verdict as it did.

In view of what has been said we give only passing notice
to the fact that appellants failed to voice any objection in
the trial court to the form of the verdict. Timely objection
in that tribunal might well have served to obviate any un-
certainty or doubt entertained by the appellants.

Judgment affirmed.

Curtis, J., Preston, J., and Thompson, J., concurred.
Rehearing denied.

Langdon, J., dissented.

[i. A. No, 14522, In Bank.—March 30, 1934.]

J. EB. KING, Respondent, v. J. EARLTON MOORE et al.,
Appellants.

Dockweiler- & Dockweiler & Finch and Walter R. Leeds
for Appellants.

Kaye & Johnstone, Homer Johnstone and W. W. Kaye
for Respondent.

THE COURT.—A hearing was granted in this case after
decision by the District Court of Appeal, Second Appellate
District, Division Two. We hereby adopt the following
statement of facts and review of the evidence by Mr.
Justice pro tem. Archbald as part of the opinion of this
court:

“Appeal by defendants from a judgment against them for
one-half of certain commissions and profits earned by them
in effecting certain sales of real estate. .

“The amended complaint alleges substantially that on’
or about the 15th day of September, 1928, defendants as
real estate brokers entered into an agreement with plain-
tiff to pay him one-half ‘of the gross commission, compensa-

a es 451

tion or profits’ which they might receive from sales made
of properties then held by them or which might thereafter
be held by them for sale to ‘anyone interested’ by plain-
tiff therein or to whom plaintiff ‘would introduce’ them.
The pleading contains three counts. The first alleges the
sale of the estate of ‘Frances Marion, widow of Fred
Thomson, deceased’, on or about April 2, 1929, to ‘a pros-
pective purchaser’ whom the plaintiff, ‘relying on his said
agreement with defendants, had theretofore procured or
caused to be introduced to the said defendants’, on which
sale the latter received a total commission of $38,000. The
second count alleges a similar sale on April 20, 1929, of
property held by defendants on ‘an option procured from
Frank Muller and Walter Muller on or about April 4, 1929,
on which sale a profit of $15,000 was made. The third
count alleges a third sale on or about August 1, 1929, of
property known as the ‘Charles Ray’ residence, upon which
sale defendants earned as commission and profit $3,500.
The jury returned a verdict for $24,082.50 in favor of
plaintiff. Defendants’ motion for a new trial was denied
as to the first two counts, but granted as to the third, the
judgment thereupon rendered being reduced by $1,750, the
amount of the verdict on such count. The appeal is from
the judgment as so modified.

HI ‘The evidence shows that the sale involved in the
first count was made by defendant Harley Moore to one
L. 8. Barnes, and in the second count by said defendant
through said Barnes to the Elbe Oil Company, of which
Mr. Barnes was seeretary-treasurer and general manager.
Plaintiff testified that he met Harley Moore in 1926 when
said defendant and his mother inspected the Casa del Mar
Club, which was then about completed and where plaintifi
was working at the time; that shortly after such meeting
Harley Moore and his mother invited plaintiff to visit
them at their home, which he did; that thereafter plaintift
saw said defendant four or five times, until in 1928, when
Harley Moore and his father, the defendant J. Harlton
Moore, visited the ‘Times home’ in Mira Mar Estates, where
plaintiff was employed by the Mira Mar Sales Corporation,
at which time he was introduced by Harley Moore to J. Earl-
ton Moore, and that he invited them to lunch. After that,
according to plaintiff’s testimony, he paid two or three
visits to the offices of defendants in Beverly Hills, and

452 Le |

that in the ‘forepart of September’ on one of such visits
Harley Moore asked ‘if I didn’t have quite a lot of wealthy
clients that would be interested in Beverly Hills property

..and he said if I had anyone he would... give me
50 per cent of ... his gross commission on any sales that
might be consummated through their firm....1I didn’t
mention any of the names until we had agreed upon a
plan of commission. The plan was that if I would make
the introduction to Harley Moore, that they would agree
to give me one-half of the gross commissions on all sales
made. I agreed to the proposition after I had asked him
if we could have a little memorandum ... to that effect
so that I would be protected by an agreement. He says,
“Well, we don’t usually do that... . We would rather put
your name right in the escrow along with ours in case
anything is done, and you will be paid direct from escrow
and the bank will handle the money and... . you will be
positively protected that way.’’?’ He testified further that
‘J. Harlton Moore, who was at his desk, turning, said, ‘‘Yes,
that is the best way to do it; that is the way we would
prefer to do it.’’’

“Plaintiff then testified that ‘he told the above-named
defendants the next day of Alfred F. Smith, who was living
at the Beverly Hills Hotel, and made an appointment to
go with Harley Moore to the hotel to meet Mr. Smith that
afternoon. There is quite a sharp conflict in the evidence
not only as to the agreement to share commissions, testified
to by plaintiff, but also as to the purpose of the visit to
Mr. and Mrs. Smith. According to plaintiff’s testimony,
the Smiths ‘were going to buy a place’ and were shown a
house by Harley Moore at the corner of Bedford drive and
Sunset boulevard that defendants had for sale. Mr. Smith
testified that he had just come to Beverly Hills and was
temporarily residing at the Beverly Hills Hotel, and that

. Plaintiff called on him with a Mr. Cottrell (another realtor) ;
that he had never seen either of them before; that there
was no discussion of the sale of a house to him, but that
he wanted to rent a house; that plaintiff and Cottrell
showed the Smiths several places for rent, as did other
realtors; that plaintiff brought Harley Moore out and in-
troduced him, and that they looked at the house at Bedford
and Sunset as a rental proposition; that nothing was said

453

about purchasing it—‘We were not in the market to pur-
chase.’ Mr, Smith’s testimony is corroborated by that of
Harley Moore. He further testified that he rented the Lita
Gray Chaplin place from another realtor for one year and
lived in it ‘for nearly a year and a half’; that he played
golf with Harley Moore beginning in the spring of 1929,
and that through the efforts of Mr. Moore he purchased the
Charles Ray place, but that Mrs. Smith was the one who
first spoke to Mr. Moore about buying the property, and
‘the first I knew of it she had looked at it before I had
ever been there’.

“About a week after he introduced Harley Moore to
Mr. Smith plaintiff met the former in his office and ‘told
him that I knew a family by the name of Barnes in Beverly
Hills and asked him if he knew them. He said no, he did
not; didn’t know where they lived. I told him that I
had known Gloria Barnes, the daughter, quite well, and
had met Mr. and Mrs. Barnes on one occasion. Q. Was
anything said with reference to whether they were looking
for property? A. Yes there was. I told him that Gloria
had told me during the summer that they bought an estate
in Beverly Hills, that Mr. Barnes was a real estate buyer and
was looking for investments and I should meet him. She
said that anything that she and her mother would select
would be satisfactory to Mr. Barnes. Gloria Barnes was
quite a horsewoman and was looking for a place where they
could have stables for their horses, . . . On that occasion I
discussed Miss Roma Seger . . . an unmarried woman,’ who
with her mother lived in Beverly Hills, and ‘I discussed
Miss Rita Seevers’ and ‘Miss LePelletier’, who were after-
wards introduced by plaintiff to Harley Moore. Plaintiff
further testified that on that occasion he told Harley
Moore, ‘I thought the best method of approach, meeting the
family, would be through the door—they would go horse-
back riding. He-agreed that would be the best plan’; that
‘the last part of September or probably the first part of
October... 1928 ...we [Harley Moore and plaintiff]
had been out to the beach and upon arriving at his office in
Beverly Hills he suggested that I get Miss Barnes on the
telephone and arrange a meeting that evening at a picture
show, or something, in order to get acquainted. I called her
on the telephone. She was out of town at the time.’ The

454 Po 7

evidence shows that Harley Moore did call Miss Barnes on
the telephone and met her about ten days after the con-
versation above mentioned with plaintiff; that he was in-
troduced by the daughter to Mr. and Mrs. Barnes in October
or November of 1928, leaving the house with the daughter
immediately afterwards for a horseback ride; that after
the death of Fred Thomson on ‘Christmas day, 1929,’ de-
fendants obtained a listing of the estate; that Gloria Barnes,
reading that the Thomson horses were to be sold, visited the
place to see them and saw the stables; that her mother
had been planning a home to be built on property which
Mr. Barnes had purchased for that purpose some time
before, and as Gloria thought the plan of the Thomson
stables good, she went with her mother to visit them in
February of 1929; that Harley Moore visited the Ambassador
horse show with Miss Barnes during the week of February
16, and that she then told him that ‘they were going to build
a new home across from Dohency’s in Beverly Hills, and
she was going to have stables there and keep her horses
there; and she said she had been up [to the Frances Marion
Thomson property] and inspected the stables, or bought a
horse from Mrs. Frances Marion Thomson, and that they
had fine stables up there; and I told her at that time that I
had the place for sale.’ Harley Moore further testified that
about a week after the horse show he asked Miss Barnes
if she thought her father ‘would consider buying the Thom-
son property instead of building a home, and she said she
was quite sure he would not; that they had their plans all
drawn and her mother had been working on them for a
couple of years, and she didn’t think she would be inter-
ested’. Moore evidently spoke to Mrs. Barnes the next
time he saw her, and ‘Mrs. Barnes told me she had already
seen the property but had never been inside of the house.
... I told her we had it for sale and would she like to
look through the house. She said yes, and I took Mrs.
Barnes and Miss Gloria Barnes up and showed them through
the house... ; that was in March, 1929.’ The evidence
shows that thereafter ‘either Mr. or Mrs. Barnes’ phoned
Harley Moore one Sunday morning and asked him to take
them to see the Thomson house, which he did; that a few
days later Mr. Barnes asked him to come and see him, and
that when he did so Mr. Barnes made an offer for the
Thomson property. This was refused by Mrs. Thomson, and

a a 455

Mr. Barnes made ‘a further offer of more money’, which
was taken to Mrs. Thomson, who accepted ‘after three or
four days ..., about the first of April, 1929’.

“‘With regard to the second sale, Harley Moore testified
that two or three days after the deal for the Thomson
property went into escrow ‘we were speaking about real
estate in general, and I told him [Mr. Barnes] that I had
an option on what I considered the finest corner in . . . the
Beverly Hills section, and that I would very much like to
show it to him, that he might be interested in its purchase’,
and that about two wecks later Mr. Barnes purchased said
property.

“It is apparent from the evidence that plaintiff was in-
troduced to Mr. and Mrs. Barnes, but that such introduction
did not register with them, as neither had any recollection
of meeting plaintiff until after the Thomson property was
purchased, when he came to inquire if they had bought it.
Mr. Barnes testified, and he is corroborated by his wife
and daughter, that neither of the latter said anything to
him about purchasing the property, but that they told him
about the riding rings and stable- and ‘wanted I should
see them so they could put something similar’ on the prop-
erty he had bought to build on; that he went with Mrs,
Barnes to look the place over; that ‘about a week or ten
days afterwards I got to thinking about it and I suggested
to Mrs. Barnes that we might not build; that there was
shrubbery on this other place and we might buy the place
and sell the other’; that ‘there were two or three conversa.
tions about it, and I finally sent for Mr. Harley Moore and
made an offer on the place, which was rejected. Some time
later he told me that he thought that we could buy the place
at a price that I was agreeable to pay.’

“Harley Moore testified that plaintiff told him about Mr.
Smith desiring to rent a ‘large house with four or five
master bedrooms’ and asked if he had any that might please
him, ‘and I told jim that I had’; that plaintiff then said
he would like to introduce Mr. Smith to him, and asked ‘if

+ we were successful in renting Mr. Smith a house, would I
split the commission with him, I told him I would’; that
at no time did he ever tell plaintiff he would give him one-
half of the gross commission, compensation or profits that
he might make from a sale of properties then held or which

456 | Ls

might thereafter be held by his firm to anyone produced
or introduced by plaintiff.

“As to the episode related by plaintiff with respect to the
Barnes family, said defendant testified: ‘That was on the
day that Mr. King . .. was trying to sell me a lot in the.
Bel Air Club... and I went down to look at it with him.
We came back to Beverly Hills and I took Mr. King to
dinner . . . and went back to our office and sat down...
about 8:30 in the evening. I asked Mr. King if he wanted
to go out and play a little bridge somewhere, and he
said, ‘Well, let us get a couple of girls and go to a picture
show.’”? I said, ‘‘Well, we will have to get someone in
Beverly Hills. It is about time for the second show.”’ He
asked me if I knew any girls in Beverly Hills, and I told
him I didn’t know any that I could eall up just at that
hour; that most of my girl friends lived in Los Angeles
or Hollywood; and he said he knew a young lady in
Beverly Hills who had not lived there very long and was
a neighbor of mine, and... he said her name was Miss
Gloria Barnes, and she was a fine horsewoman, and that
I rode horseback some, and that probably it would be a
good thing if we were acquainted with each other;...
I said ‘“‘all right, call her up.’? And he called the Barnes
home and Miss Barnes was not there;... Mr. King said
to me that he would like to have me know Miss Barnes

.. and that he would give me his card with her name,
phone number and address on it, and some time at my
leisure I might call her up and say to her that I was a
friend of his and that way I might meet her.’ ”’

The foregoing review of the pleadings and testimony
demonstrates that the jury’s verdict is supported by sub-
stantial evidence, and that the judgment should be sustained
unless serious error is shown. Defendants strenuously con-
tend that prejudicial error was committed by the trial
court in the reception of certain testimony, and that this
alleged error is ground for reversal of the judgment.

Hl The testimony referred to is that of Miss LePelletier,
Miss Seevers and Miss Seger, each of whom testified over .
objection that plaintiff introduced them to defendant Harley
Moore on ‘‘a business transaction’. It appears that de-
fendants did not sell these witnesses any property, and that
in fact they were principally interested, at the time, in

a a 451

selling their own property, rather than in purchasing prop-
erty through defendants. Defendants make the point that
the fact that these three women listed their properties for
sale could not be probative on the issue of an agreement to
divide commissions on property purchased.

Preliminarily, we deem it proper to state that in a record
such as that before us, with substantial evidence to support
the plaintifi’s claim, it is not easy to characterize this
evidence as seriously prejudicial, even if improper. The
contention is that it was irrelevant, but while collateral
matters not connected with the issues should be excluded,
prejudicial error from their admission should reasonably
appear, and we doubt whether the confusion of the jury in
this case was as great as appellants maintain. -

But in fact the evidence was admissible. Plaintiff testified
to an oral agreement by which he was to introduce de-
fendants to wealthy ‘‘clients’’ and ‘‘prospects’’, and de-
fendants were to do the work of selling, and divide com-
missions with plaintiff. Plaintiff’s duty was solely to
make the contacts or introductions. Plaintiff was permitted
to testify without objection that on the occasion of arriving
at this agreement, they discussed the names of several
prospects, that is, the details of plaintiff’s anticipated per-
formance, and at this conversation plaintiff and defendant
discussed the names of the Barnes family, Miss Seger, Miss
Seevers and Miss LePelletier. Any evidence showing that
plaintiff brought these very people in contact with defend-
ants tends to corroborate the fact of the agreement itself,
which was in dispute. The rule that acts of the parties
subsequent to an agreement may be competent evidence of
its terms is well settled. (Tennant v. Wilde, 98 Cal. App.
487 [277 Pac. 187].) See, also, as to the admissibility of
the testimony in question, Moody v. Peirano, 4 Cal. App.
411 [88 Pac. 380]; Lobree v. White Lumber Co., 53 Cal.
App. 85 [199 Pac. 821].

Moreover, it appears from the testimony of one of these
witnesses, Miss Seger, that she was a future prospect. On
eross-examination by counsel for defendants, as to whether
there was any understanding between herself and plaintiff
that upon sale of her property she might buy, she testified:
“T said I might be interested . . . but would not be further
interested until I would dispose of the Beverly Hills house.’

458 Pt 7

Finally, it appears that the very evidence objected to—
the fact that these three women were introduced by plain-
tiff to defendant and were interested in selling their prop-
erty—was also given by defendant Harley Moore, who,
under examination of his own counsel, recited the same
matters, that is, that plaintiff introduced him to these
women and that they listed property with defendants for
sale.

The record shows, therefore, that the introduction to
these three women was part of the agreement as related in
plaintifi’s testimony; that their names and the facts con-
cerning the transactions had with them were given in evi-
dence both by plaintiff and defendants, without objection;
and that one of them was interested in purchasing property
in the future. It seems to us that their testimony tended to
corroborate the essential fact of the agreement, and though
subject to different inferences, was admissible. In any
event, the jury, having before them their names and the
very facts to which they testified, could not have been
prejudiced by their direct testimony.

We find no reversible error. The judgment is affirmed.

[L, A. No, 14406. In Bank.—March 30, 1984.]

WILLTAM U. HENSHAW, Respondent, v. B. W. BELYEA,
Appellant.

| 459

Harry D. Parker and White McGee, Jr., for Appellant.

Leslie 8. Bowden, Gaines Hon and Horace W. Danforth
for Respondent.

THE COURT.—Appeal from a judgment entered on a
jury’s verdict for the plaintiff in an action to recover
damages for personal injuries.

On August 28, 1933, the plaintiff was employed by
Grunewald & Tudor, who were under contract to do excavat-
ing work at 114th Street and Budlong Avenue in the city
of Los Angeles. The defendant, B. W. Belyea, who con-
ducted a trucking business, was éngaged by Grunewald &
Tudor to haul an excavating shovel to that intersection on
that day. Budlong Avenue, which runs north and south,
intersects 114th Street with a jog. That is, Budlong Avenue
north from 114th Street intersects the latter street a distance
of from 60 to 90 feet easterly from the point where Budlong
Avenue intersects the southerly side of 114th Street. The
latter was a paved street. It was graded downward from
the east to the north extension of Budlong Avenue. Up-
ward from the west curb of the north extension of Budlong

460 | 7

Avenue to the south extension of Budlong Avenue there
was about a ten per cent grade. The district was apparently
a sparsely settled community. The plaintiff, who was em-
ployed to operate the shovel and whose duties also included
the rendering of assistance in getting the shovel to the
job and in loading and unloading it, arrived at the inter-
section in advance of the truck.

The plaintiff was standing on the south side of 114th
Street near the east curb of the south extension of Budlong
Avenue talking to Mr. Coon, the contractor on the job,
when the truck advanced down 114th Street from the east
toward the north extension of Budlong. The excavating
shovel was loaded on the truck and a trailer, the length
of which over all was about 61 feet. The combined weight
of the truck, trailer and shovel was 81,000 pounds, or over
40 tons. The driver of the truck, Norman Kresge, was
alone. He passed the-north extension and commenced the
climb upward toward the south extension. It was his in-
tention to unload at the south extension, where the excavat-
ing was to be commenced. Near the east curb line of the
south extension the truck stopped. The driver testified that
he was unable to get the truck and trailer with its load over
the grade and that he therefore started backing down on
compression. There was testimony that the drive wheels,
which also were the only wheels connected with the foot
and hand brakes, started to slide. The plaintiff ran from
his position on the eurb, took a ‘‘4x4’? four-foot block from
the truck bed, carried and used for such purpose, and placed
it under the left drive wheel in an attempt to stop the
truck and trailer. As he reached for another block, the
wheel, passing over the inner end of the block, raised its
outer end, which caught and crushed under it the plaintiff’s
right foot and ankle as the wheel went over the block. At
the same time that the plaintiff was putting a block under
the wheel of the truck, another witness, Mr. Glancy, placed
a block under the rear wheel of the trailer, which ran over
the block, whereupon he placed another block under the
same wheel and at the same time heard the plaintiff ery
out. The truck then stopped almost instantly. Mr. Glaney
and the plaintiff both testified that the drive wheels seemed
to be sliding at the time they ran out to place the blocks.
Instructions were given to the jury on the issues of the
defendant’s negligence and the plaintiff’s contributory negli-

ee 461

gence. The jury returned a verdict for the plaintiff in the
sum of $15,349.70. From a judgment entered thereon the
defendant has appealed.

i | The jury was instructed that if the defendant was
negligent in the operation and management of the truck
and such negligence imperiled human life, the plaintiff, it
his acts were reasonably necessary for the safety of human
life, was not contributorily negligent in voluntarily leaving
a place of safety and incurring danger so long as he did not
act with a recklessness which would not be warranted under
the circumstances in the judgment of a prudent man.

Two contentions are made on this appeal. First, that
there was no evidence sufficient to warrant the jury in find-
ing that the defendant was negligent; second, that there was
not sufficient evidence to sustain the jury’s implied finding
that human life was imperiled so as to justify the plain-
tiff’s conduct or to warrant the issue of contributory negli-
gence being submitted to the jury on that theory. Error is
also assigned on the court’s refusal to grant the defendant’s
motion for a nonsuit.

‘We are not able to say on the facts presented that the
question of the defendant’s negligence was not for the
jury. Whether the truck with the trailer was properly
equipped with brakes, whether these vehicles were out of
control, and whether there was negligence in the operation
thereof, presented close questions of fact which might, on
this record, be resolved either way. The principal question
presented is whether the court applied the correct doctrine
under the circumstances of the present case by the instruc-
tion above noted. It is the defendant’s contention that the
evidence on the question whether human life was imperiled
is insufficient to justify the submission of the issue of the
plaintiff’s contributory negligence to the jury under that
instruction and that no other theory is applicable; hence
that the court should have granted the defendant’s motion
for a nonsuit.

The doctrine in question grew out of such cases as Eckert
v. Long Island R. RB. Co., 43 N. Y. 502 [8 Am. Rep. 721],
said to be the leading case allowing a recovery by the
rescuer against a defendant by whose negligence the person
rescued was placed in a position of danger. There the
rescuer attempted to reseue a child on a railroad track
from in front? of a rapidly approaching train. He suc-

462 Pt 7

ceeded in his object but was himself killed: The court
stated the general rule which has since been followed in
similar cases, as follows: ‘‘Under the circumstances in which
the deceased was placed, it was not wrongful in him to make
every effort in his power to rescue the child, compatible
with a reasonable regard for his own safety. It was his
duty to exercise his judgment as to whether he could
probably save the child without serious injury to himself.
If, from the appearances, he believed that he could, it was
not negligence to make an attempt to do so, although be-
lieving that possibly he might fail and receive an injury
himself. He had no time for deliberation. He must act
instantly, if at all, as a moment’s delay would have been
fatal to the child. The law has so high a regard for human
life that it will not impute negligence to an effort to
preserve it, unless made under such circumstances as to
constitute rashness in the judgment of prudent persons.”

In Pierce v. United Gas & Elec. Co., 161 Cal. 176 [118
Pac. 700], it was indicated that the general rule was ap-
plicable in this state, although a verdict and judgment in
that case was reversed on the ground, among others, that
the issue of the defendant’s negligence toward the person
being rescued was not properly submitted to the jury.
Whether the rescuer acted with a recklessness unwarranted
by the judgment of a prudent man in attempting to
rescue one placed in peril by the defendant’s negligence was,
in McClure v. Southern Pac. Co., 41 Cal. App. 652, 656
[183 Pae. 248], stated to be the test in arriving at a con-
clusion whether he was guilty of contributory negligence.
(19 Cal. Jur. 602.)

No difficulty in the application of the principle arises
when the facts are similar to those involved in the Eckert
case and clearly show that some particular person is found
in such imminent peril as that the rescuer instinctively and
spontaneously responds to the call for immediate action to
avert impending injury or death. In cases involving such
circumstances the principle is recognized without conflict
and applied wherever the question of the defendant’s neg-
ligence is properly one for the jury. (Linnehan v. Sump-
son, 126 Mass. 506 [30 Am. Rep. 692]; Norris v. Atlantic
C. L. RB. Co., 152 N. C. 505 [67 8. EB. 1017, 27 L. RB. AL
(N. §.) 1069 and note]; Corbin v. Philadelphia, 195 Pa,

SC 463

461 [45 Atl. 1070, 78 Am. St. Rep. 825, 49 L. R. A. 715,
and note]; Wagner v. International R. Co., 232 N. Y. 176
[1838 N. E. 437, 19 A. L. R. 1, and note]; 20 R. C. L. 131
et seq.; see Donahoe v. Wabash, St. L. & P. BR. Co., 838 Mo.
560 [53 Am. Rep. 594]; Bracey v. Northwestern Imp. Co.,
41 Mont. 338 [109 Pac. 706, 187 Am. St. Rep. 738]; Taylor
Coal Co. v. Porter’s Admr., 164 Ky. 523 [175 S. W. 1014,
1017].) The foregoing authorities also establish that in
such cases it is for the jury to say whether the plaintiff has
acted with prudence under the circumstances or has con-
ducted himself in so reckless a manner as to defeat the
right of recovery.

The conflict in the application of the doctrine to the
facts in particular cases has arisen when it was sought to
apply the principle where the peril was not imminent or
did not threaten a particular person, or where there was
no threat of danger to human life but the motive and pur-
pose of the plaintiff was to prevent damage to property.
In the present case there was a conflict in the evidence as
to whether there were other people in the street. It was,
however, not a busy thoroughfare. There was evidence
from which the jury could believe that there was a boy on
a bicycle a distance of 50 or 60 feet behind the truck and
that there were some other children on the sidewalk on the
south side of 114th Street, a distance of about 100 feet.
There is no conflict as to the fact that there was no one
in a position of such imminent and immediate danger as is
described in the foregoing cases, and the plaintiff himself
testified that he attempted to stop the truck because he
thought it was his duty to his employer.

"Tt has been stated that the threatened danger must be
imminent and real, and not merely imaginary or specula-
tive. (Note, 19 A. L. R., supra, at p. 10, and cases cited.)
The defendant contends that cases holding to that effect
are applicable to the present situation. The case prin-
eipally relied upon is Eversole v. Wabash R. Co., 249 Mo.
523 [155 S. W. 419]. In that case the defendant’s en-
gineer was backing a string of freight-cars on a down grade
and the cars became uncoupled from the engine when the
engineer slackened the speed. The plaintiff, a bystander,
who was an experienced switchman, jumped on the engine
and signaled to the engineer that he would make the coup-
ling if the engineer would speed up and overtake the string,

464 a 7

to which the engineer assented. Before, however, he had
gathered the requisite speed the runaway string collided
with another train, and the plaintiff was caught between
the freight-cars and the engine. The court in that case,
referring to a previous decision (McManamee v. Missouri
Pac, Ry. Co., 185 Mo. 440 [87 8. W. 119]), stated that it
had never extended the doctrine of the Eckert case to mere
property. It concluded that the question had therefore
been improperly submitted to the jury because no one was
shown actually to have been in peril, inasmuch as the track
was not one used for passenger service and the hour was
midafternoon, when passenger trains were not arriving.
Furthermore, unknown to the plaintiff, the crew had been
signaled to leave and had left the train. The court said:
‘But, further, one who attempts to assert the original neg-
ligence of a defendant toward one who is in peril must
show that there was someone in peril and that he acted
from humanity’s sake to rescue such person from peril.
It is only under such circumstances that the usual rash acts
of the reseuer is excusable, and he is permitted to impute
the negligence committed as against the person in peril to
himself. Under the evidence in this case, plaintiff saw no
person in peril... . Some one must be actually in peril
before the rescuer is authorized to act. At the broadest,
the situation must be such as to clearly convince the
rescuer that human life or limb is in peril.’? By similar
reasoning a conclusion was reached in the case of Wilson
v. New York, N. H. & H. R. Co., 29 R. I. 146 [69 Atl.
864], that a brakeman, who met his death when he was
looking backward trying to scare children from running
alongside the train by being hit by a post negligently main- °
tained on the right of way, was contributorily negligent
because no imminent danger to human life was shown.
The court expressly refused to extend the principle of the
Eckert case to the circumstances there presented. The case
of Wright v. Atlantic Coast Line R. R. Co., 111 Va. 670
[66 S. E. 848, 19 Amn. Cas. 489, 25 L. RB. A. (N. S.) 9721,
is also relied upon by the defendant. There the plaintiff
stood in the track of an approaching freight train fran-
tically signaling it to stop in order to avert injury to her
mother, who was walking alongside in a place of safety,
but whom the plaintiff knew would step in the path of the
freight in the belief that it was the passenger train which

ee 465

customarily stopped on signal and which they expected to
board. It was held that the defendant was not negligent
inasmuch as no duty rested upon it either to stop or to
slacken its speed, nor was it negligent in interpreting the
plaintiff’s signal, not as a warning, but as a stop signal
for a passenger train. The court furthermore refused to
apply the imminent peril doctrine inasmuch as the mother
was not in a position of peril but in fact was in a place of
safety at the time the plaintiff signaled and ‘“‘that the
mother’s peril arose when she deliberately stepped from
her place of safety in the public road upon the track in
front of a rapidly moving train, when it was too late to _
save her or to save the plaintiff. According to the authori-
ties, as already seen, the mother must have been at the
time of the attempted rescue in a place of imminent danger
caused by the negligence of the defendant in order to
excuse the contributory negligence of the plaintiff.” The
fact, however, that in that case negligence of the defendant
was not proved disposes of it and renders it a case not in
point on the present discussion. Likewise the case of Tyler
v. Barrick & Son, 178 Iowa, 985 [160 N. W. 273], also
relied upon, is not of any particular assistance. A ground
of the decision in that case was that the danger to the
person supposedly being rescued was in part due to the
plaintiff’s own acts, which on the facts did not free him
from the charge of negligence which either contributed to
or was the sole proximate cause of his injury.

On the other hand courts have extended the principle
underlying the decision in the Eckert case to facts where,
although no person is shown to be directly in the path of
@ moving instrumentality and in no imminent danger from
which an immediate rescue is imperative in order to save
him from certain injury or death, nevertheless it is shown
that injury might‘ result to persons in the vicinity unless
steps be taken to stop the moving agency. Cases involving
runaway horses illustrate this extension of the Eckert case.
(See note, 19 A. L. R., supra, at page 28 et seq.) Such a
ease is Hollaran v. City of New York, 168 App. Div. 469
[153 N. Y. Supp. 447], wherein it was decided that it was
not necessary that the danger should have reached or
menaced a particular person and that under the particular
facts it was a fair question for the jury whether the ven-
ture of the decedent was justified by the circumstances.

466 es a

The court cited Manthey v. Rauenbuehler, T1 App. Div.
173 [75 N. Y. Supp. 714], where the principle of the Eck-
ert case was applied under similar facts. There the test
was stated to be that ‘‘the action of the deceased is clearly
to be measured by what was reasonably likely to happen if
the horse continued upon its course’. The Supreme Court
of Illinois, in the case of Devine v. Pfaelzer, 277 Ill. 255
{115 N. BE. 126, L. BR. A. 19170, 1080], recognized the ex-
tension of the doctrine in the two foregoing cases, but con-
cluded that the trial court erred in not directing a verdict
for the defendant where the evidence was that there were
no people in the roadway and there was no evidence that it
was a busy street and where the plaintiff had no occasion
to believe that anyone was in danger. Also, in the case of
McDonald vy. Burr, 12 Sask. Li. R. 482, recovery was not
allowed in the absence of evidence that children were in
the strect or other evidence to support the palintiff’s stated
apprehension that lives were in danger. In American Ea-
press Co. v. Terry, 126 Md. 254 [94 Atl. 1026, Ann. Cas.
19170, 650], the plaintiff was injured while attempting to
stop an electric truck which was running without a driver
in control. There were persons and other cars in the
street, although not in the immediate path of the truck.
It was held that the court properly submitted to the jury
the questions of the defendant’s negligence and the plain-
tifft’s contributory negligence, and the further question
whether the moving truck endangered the lives and prop-
erty of persons on the street. In Thoresen v. St. Paul &
Tac. L. Co., 73 Wash. 99 [181 Pac. 645, 132 Pac. 860], the
plaintiff, a stevedore, was engaged in unloading lumber
from small flat top cars on to the dock. These cars were
ordinarily pushed around by hand. There was no buffer
or block to prevent the cars running off the end of the
dock. The plaintiff observed an unattended loaded car
coming down an incline at a considerable speed, which had
been negligently started down by the defendant’s employee.
He endeavored to stop it by twice placing a board in front
of the hind wheel. On the third attempt the front wheel
van over the shorter rail at the end of the dock and some
lumber falling off crushed the plaintiff’s legs. The plain-
tiff recovered a judgment. It was said: ‘‘Attention is
called ... to the further fact that no harm could have
come, as the sequel proved, had the car been allowed to run

SS 467

to the end of the rails. But notwithstanding the respond-
ent’s acts may not have been essential either to preserve
the property from loss or protect other individuals from
harm, we think nevertheless that the question whether his
act constituted contributory negligence was a question for
the jury. He was entitled to act upon appearances, and
if his conduct was that of a reasonably prudent person
under the circumstances, he is not to be charged with con-
tributory negligence even though he may have been de-
ceived thereby.’? It was also held that the plaintiff’s tes-
timony as to his motive in attempting to stop the car, viz.,
to prevent destruction to property and possible injury to
persons, was admissible inasmuch as the plaintiff’s motive
was material on the issue of his contributory negligence.

On the present record the only motive which the plaintiff
had and the only motive which is supported by the evi-
dence was that to save property and principally the prop-
erty of his employer. This is not a case involving a run-
away or fast-moving instrumentality with no one in control.
The only deduction which the plaintiff was reasonably jus-
tified in making from the driver’s actions and the move-
ments of the truck was that the motor was not equal to
pulling the load to the top of the grade, that the truck
started back by its own weight and that the brakes were
insufficient to prevent the truck’s gathering momentum;
that if additional aid in checking the momentum of the
truck was not immediately furnished, serious injury to the
shovel might conceivably follow. There were no appear-
ances which would justity the plaintiff in concluding that
persons in the vicinity might be endangered. The street
‘was not a busy one, and there was no evidence that the few
persons who were about were or would be in such a position
as to be unable to utilize their own faculties in more than
sufficient time to keep clear of such a large and slow-mov-
ing vehicle and load, which at best, on account of the
topography of the roadway, could move back but a short
distance on its own momentum. We conclude that the
court committed error in submitting to the jury the issue
of contributory negligence based on the theory that human
beings might be shown to have been in imminent peril, or
in any danger of injury, and that the giving of the in-
struction on that theory was prejudicial to the rights of
the defendant.

468 PF 7

HH lt does not follow, however, that the issue is not
properly one for the jury on any theory and that the mo-
tion for a nonsuit should have been granted. Some of the
decisions have followed the dictum in the Eckert case (Eck-
ert vy. Long Island R. Co., swpra, at p. 506), and have de-
nied a recovery on the ground of the plaintiff’s contribu-
tory negligence where he has assumed the role of rescuer
‘*in the protection of mere property’. (See note to Cor-
bin v. Philadelphia, supra, 49 L. R. A., at p. 719.) There
is, however, a well-defined diversity of opinion and decision
on the question when it relates to an attempt to save prop-
erty from destruction; but where the attempt is by the
owner to save his own property or by the employee to save
the property of his employer the recovery has generally
been allowed. Authorities holding divergent views are
collected in a note following the case of Pegram v. Sea-
board Air Line Ry., 189.N. C. 303 [51 8. B. 975, 4 Ann.
Cas., at pages 216 and 217], and in a note following the
case of McKay v. Atlantic Coast Line R. R. Co., 160 N. C.
260 [75 S. EB. 1081, Ann. Cas. 19140, at pages 4138 and
414]. In Pegram v. Seaboard Air Line Ry., supra, in its
discussion of the question whether the doctrine is appli-
cable when the person injured or killed has attempted to
save property from destruction the court stated: ‘‘Some
jurisdictions deny the right to recover at all, while others
have extended the rule so as to give the party injured
redress where his effort to save property has been such
as a reasonably prudent man would have made under simi-
lar circumstances. No one, however, should be permitted
to recover for injury sustained in attempting to recover
mere property in the face of obvious danger such as no
reasonably prudent man would under the circumstances in-
cur (citing authorities). ... We are willing to hold with
many able jurisdictions that when the employer’s property
is set on fire by the negligence of another, the employee
may attempt to rescue it, but not in the presence of obvious
danger.’’ Following that pronouncement, the court in the
cease of McKay v. Atlantic Coast Line R. Co., supra, re-
versed a judgment for the defendant. Other cases cited
as in accord in the. note following that case in Ann. Cas.
1914C, at page 414, are: Davis v. Savannah L. Co., 11 Ga.
App. 610 [75 8. E. 986]; Leavenworth Coal Co. v. Batch-

cl 469

ford, 5 Kan. App. 150 [48 Pac. 927]; Finnigan v. Biehl,
61 N. Y. Supp. 1116; Ivy v. Wilson, Cheves L. (S. C.) 74;
Thompson v. Seaboard Air Line Ry., 81 8. OC. 333 [62
S. BE. 396, 20 L, BR. A. '(N. S.) 426];. Temple Elec, Light
Co. v. Halliburton, (Tex. Civ. App.) 136 8. W. 584; Thorn
v. James, 14 Manitoba, 373. (See, also, Henry v. Cleve-
land etc. R. Co., 67 Fed. 426; Liming v. Illinois Cent. RB.
Co., 81 Iowa, 246 [47 N. W. 66].) In Thompson v. Sea-
board Air Line Ry., supra, the rule supported by the fore-
going cases is stated to be: ‘‘The rule was established in
this state in 1840 by the case of Ivy v. Wilson, Cheves, 74,
that it is not contributory negligence per se for one who
owes the duty to protect property to take a manifest risk
to save it, unless the risk was wanton or unreasonable, and
that the exposure by a person so situated is not to be pre-
sumed to be wanton or unreasonable exposure to unneces-
sary danger. The test is whether a reasonably prudent
man in the same exigency would have assumed the peril.’
‘We conclude that the authorities support the application
of that rule to the facts in the present case.

One of the principal cases cited as illustrating the con-
trary conclusion is that relied upon by the defendant here,
viz.: Eversole v. Wabash R. Co., supra. In 20 R. 0. L, at
page 183, section 110, the foregoing divergence of opinion is
noted and the statement is made that the weight of modern
authority favors the extension of the doctrine so as to give
the party injured redress where his effort to save property
has been such as a reasonably prudent man would have made
under the circumstances. In this jurisdiction the case of
Deville v. Southern Pac. R. R. Co., 50 Cal. 383, appears to be
the only decision which bears upon the question. In that
ease the plaintiff attempted to rescue his vegetable wagon and
team of horses from the path of the defendant’s approaching
train. One of the grounds of denial of the plaintiff’s right
to recover was his contributory negligence in leaving his
team unhitched in close proximity to the railroad track at
a time when the train usually came so that they became
frightened and ran upon the track. The result in that
ease is not inconsistent with the trend of modern authority.

Under the decisions hereinabove cited as illustrating the
weight of authority on the subject, we conclude that there
was no error in denying the motion for a nonsuit. In view

470 es =

of the condition of the record the issue of the alleged neg-
ligence of the defendant should be retried, if a retrial is
had, and the issue of the alleged contributory negligence
of the plaintiff should be retried in accordance with the
views herein expressed.

The judgment is reversed.

Rehearing denied.

[L. A. No. 14079, In Bank—Mareh 30, 1934.]

C. W. LANDIS et al. Petitioners, vy. RAILROAD COM-
MISSION OF THE STATE OF CALIFORNIA, Re-
spondent.

472

Dixon & Howell, J. J. Laton, C. P. Von Herzen and Thos.
J. Dixon for Petitioners.

Arthur T. George, Ira H. Rowell and Roderick B. Cassidy
for Respondent.

THE COURT.—This is a proceeding to review an order
of the railroad commission requiring the petitioners to cease
their operations as carriers of freight by motor truck be-
tween Log Angeles and the San Francisco bay region and
intermediate points unless and until they have received a
certificate of public convenience and necessity as provided
in the Auto Stage and Truck Transportation Act of 1917.
(Stats. 1917, p. 330, as amended Stats. 1929, p. 1894.)

In July, 1932, complaints were filed with the commission
charging the petitioners and others with owning and operat-
ing automotive trucks for the transportation of property as
common carriers over the highways of the state between
fixed termini or over regular routes, to wit: Between Los
Angeles and the San Francisco bay region and intermediate
points. Answers were filed by the several carriers and after
extended hearings the commission made the findings and
order complained of. A petition for a rehearing was
denied.

The present petition was filed on behalf of three of the
fourtcen carriers affected by the order. After the petition’
herein was filed, the petitioner, Merle C. Turner, doing busi-
ness as the Turner Van & Storage Company, sold his busi-
ness and left the state. From this showing by the peti-
tioners in their closing brief the petition, so far as Turner
is concerned, will be deemed abandoned and the present pro-
ceeding will be considered as affecting the other two, who
will be referred to as the petitioners.

 :

The commission found the petitioners, as to the routes and
termini set opposite their respective names, each to be a
“transportation company”’, as defined in section 1, subsec-
tion (¢) of the Auto Stage and Truck Transportation Act,
transporting for hire over the public highways new and
second-hand household goods, office furniture and personal
effects without having a certificate of public convenience
and necessity for such services. The routes and termini
specified in the order are the same for each of the peti-
tioners, and, as set opposite their names, are Los Angeles
and San Francisco Bay points of San Francisco, Oakland,
Berkeley, Alameda, Emeryville, Piedmont, Albany and
intermediate points. No other business of the petitioners is
affected by the order of the commission.

The finding of the commission that the petitioners
are ‘‘transportation companies’’ as defined by the statute
is a finding of ultimate fact. It imports a finding that
each is a common carrier of property over the highways of
the state and that each operates between fixed termini or
over a regular route. This finding is attacked as having no
substantial evidence to support it.

The petitioner Landis claims to be a private or
“radial on call carrier’’, operating under contract in each
ease. The evidence in support of the finding of the com-
mission shows that he maintains a regular place of business
in Los Angeles in conjunction with the De Luxe Transfer
& Storage Company, which does no long distance hauling;
that in San Francisco he has a business arrangement with
the Owl Transfer Company which does no long distance
hauling, but takes orders for that class of business and
refers the same to this petitioner; that this petitioner adver-
tises and otherwise holds himself out to go anywhere if the
price is agreeable; that about twenty-five per cent of his
business is interstate; about twenty-five per cent is local
to Los Angeles; about twenty-five per cent is intrastate
outside of the Los Angeles-San Francisco route, and about
twenty-five per cent is between Los Angeles and the San
Francisco Bay region and intermediate points. The order
of the commission relates only to the business representing
the twenty-five per cent last above noted.

As to the petitioner Landis we think the evidence brings
him within the definition of a common carrier, as defined by

a4 ee |

the code (Civ. Code, sec. 2168), and generally by the courts
in this and other jurisdictions. (See People v. Dwntley, 217
Cal. 150 [17 Pac. (2d) 715]; Terminal Tamicab v. Kute, 241
U. S. 252 [36 Sup. Ct. 583, 60 L. Hd. 984]; Sanger v.
Lukens, 24 Fed. (2d) 226.) The last case cited contains
the following satisfactory definition of a common carrier
applicable generally, -to wit: ‘‘One who, by virtue of his
calling and as a regular business, undertakes to transport
persons or commodities from place to place, offering his
services to such as may choose to employ him and pay his
charges.’’ This definition is particularly applicable to the
petitioner Landis under the evidence. Within the limits
of his equipment he holds himself out to haul what he offers
to carry to those who may choose to employ him and pay
charges satisfactory to him. Hig offer to the publie was
such that he could not with reagon be classed as a private
or contract carrier. True, his customers were limited to
the particular class of those who desired the transportation
of furniture and like personal effects. But those were the
commodities which he offered to carry and his ‘‘public’”’
were they who desired the transportation of those com-
modities. As applied to certain types of common carriers,
“*the public does not mean everybody all the time’’. (Zer-
minal Taxicab Co. v. Kutz, supra.)

HI The commission was faced with another problem in
determining whether the petitioner Landis was operating
between fixed termini or over a regular route. As to his
local business, his interstate business, and his long distance
hauling within the state from Los Angeles to points other
than in the San Francisco bay region, the commission
apparently concluded that it could not reasonably be found
that he was operating either between fixed termini or over
a regular route. As to the remaining substantial part of
his business, the commission found and the evidence pointed
reasonably to the conclusion that because of his business
connections in Los Angeles and at San Francisco Bay points,
and his methods of conducting business between those points,
those places might be considered the termini between which
he was conducting that portion of his business or that, as
to such business, he traveled over a regular route. From
either standpoint we are not prepared to say that the find-
ing of the commission is without support in the evidence.

___

The fact that this petitioner may have more than one-half
of his business not subject to regulation by the commission
under present law, obviously could not render the portion
of his business which is subject to such regulation immune
from the control of the commission’s proper regulating
supervision.

[| The petitioner Safeway Van and Storage Company
is a corporation which has its place of business in Los
Angeles. It conducts a ‘‘radial on call’’ trucking business,
also transporting furniture and personal effects for whomso-
ever may employ it at the price agreed upon. It has no
similar business or business connection in the San Francisco
bay region and does not advertise to haul goods between
the two points involved. Between February 1 and August
15, 1932, it hauled six loads from Los Angeles to San Fran-
cisco. On occasion it left some of the goods transported at
the Busk Van and Storage Company of Oakland, with which
firm J. J. Busk, the president of this petitioner, was form-
evly connected, and on some of the trips it received goods
for the return trip from the Checker Van and Storage
Company of San Francisco, with which other members of
the Busk family were connected. The foregoing is all of
the evidence cited to us as constituting facts sufficient to
vest the commission with jurisdiction to subject this peti-
tioner to the regulatory order. We are unable to conclude
that this evidence was sufficient as matter of law to support
the finding and order of the commission. J Assuming
that the evidence was ample to support a finding that this
petitioner was a common carrier, it is deficient as a showing
of the jurisdictional facts, either that it was operating
between fixed termini or over a regular route. There was
no substantial showing that it operated between fixed
termini, and in connection with its other business its
occasional trips to San Francisco with its two trucks were
insufficient upon which to base a finding that the prescribed
route was the route over which it ‘‘usually or ordinarily
operated’’ its trucking business. Under these circumstances
it must be held that there is no substantial evidence to sup-
port the finding. In the absence of sufficient jurisdictional
facts the order as to this petitioner must be annulled. (See
Pacific Tel. & Tel. Co. v. Eshleman, 166 Cal. 640 [187 Pac.

476 a

1119, Ann. Cas, 1915C, 822, 50 L. R. A. 652]; Traber v.
Railroad Com., 183 Cal. 804 [191 Pac. 366].)

HM Complaint is made of alleged ambiguity in the
decree wherein the commission states: ‘‘That these indi-
vidual defendants, with but few exceptions, are, in fact,
common carriers is clear.’’ This statement was contained
in the opinion preceding the findings and order and related
to a consideration of the status of all of the defendants.
The finding as to each defendant is not subject to the same
criticism, for the finding as to each of the petitioners is
definite and specific.

The order as to the Safeway Van and Storage Company,
a corporation, is annulled. The order as to C. W. Landis,
doing business as the Highway Transportation Company,
is affirmed.

[I. A, No, 18740. In Bank—March 30, 1984.]

LILLIAN E. EVANS, Respondent, v. GRACE INA GIB-
SON et al., Executrices, ete, et al., Appellants.

Anderson & Anderson and Frederick M. Kincaid for Ap-
pellants.

J. K. Wilson and J. OC. Landry for Respondent.

THE COURT.—Plaintiff Lillian E. Evans owned real
property in the city of San Diego which was found by the
court to be of the reasonable value of $31,500, and was sub-
ject to encumbrances in the amount of $15,500. She was
induced to exchange said real property for a promissory
note in the sum of $16,000, executed by defendant James L.
O’Donahue. This note, together with another note for
$16,000, also executed by O’Donahue, was secured by a
second deed of trust lien for $32,000 on property in River-
side County known as the Granite Hill Ranch. Plaintiff
prayed judgment against all defendants for $16,000, with
interest, on the theory that the note transferred to her and
found by the court to be worthless would have heen worth
its face value if the representations had been true which,
she alleged, were made to her, in pursuance of a conspiracy
between the defendants, concerning the financial responsi-
bility of the maker, O’Donahue, and the value of the Granite
Hill Ranch as security. (12 Cal. Jur. 843.)

The court entered judgment in favor of plaintiff for
actual damages in the sum of $21,313.06, which represents

ae 419

the face value of the note plus interest, and for exemplary
damages in the sum of $5,000. Of the several defendants,
only Grace I. Gibson and Thelma Gibson, as executrices of
ihe estate of John W. Gibson, and Frederick M. Kincaid
have appealed. It is contended that if the judgment is
not reversed, at least it should be modified by reducing the
amount of interest included as actual damages, and by
eliminating the award of exemplary damages against defend-
ant executrices. Plaintiff’s appeal from an order granting
a new trial as to defendant Grace I. Gibson in her individual
capacity was heretofore dismissed. (217 Cal. 171 [17 Pac.
(2d) 701].) An order granting a new trial is appealable
only in an action tried by a jury where trial by jury is a
matter of right. (Sec. 963, Code Civ. Proc.)

The essentials of the fraudulent scheme which the court
found was perpetrated on plaintiff were as follows: John
‘W. Gibson, who died before trial, and whose executrices
were made parties defendant, was the beneficial owner of
the Granite Hill Ranch, but record title thereto stood in
the name of defendant Frederick M. Kincaid, who was
Gibson’s lawyer. The court found that the value of said
ranch did not exceed $22,000. On December 5, 1927, Kin-
eaid executed a deed to the ranch naming James L. O’Dona-
hue, his brother-in-law, as grantee. On the same date
O’Donahue executed three notes, payable to Kincaid, for
the total sum of $77,000, one for $45,000 and two for
$16,000 each. One of the $16,000 notes was payable one
year from date, and the other two years from date. The
note for $45,000 was secured by a first deed of trust lien
executed by O’Donahue on the ranch, and the two $16,000
notes by a single deed of trust for $32,000, which was a
second lien. At the same time O’Donahue signed and de-
livered to Gibson a deed to the ranch naming Gibson’s
daughter, Thelma Gibson, as grantee, which deed was never
recorded. O’Donahue was a single man, under thirty years
of age, and was employed as a truck driver at a wage of
$4.50 a day. He was without other assets, and, as noted
above, was Kincaid’s brother-in-law.

This transaction with O’Donahue, plaintiff contends, and
the evidence will support no other inference, was not a
bone fide sale or transfer, but was a simulated transaction
had solely for the purpose of bringing into existence the

"480 Pe ||

several notes and deeds of trust therein executed, with the
intent and design that said instruments should be used to
cheat and defraud persons ignorant of the circumstances of
their origin.

The $45,000 note secured by a first deed of trust, which
was for a sum far exceeding the value of the Granite Hill
Ranch as fixed by the court, was transferred to Mrs. Ellis
Hill Rogers on December 23, 1927, in exchange for unen-
cumbered property in Pasadena. Gibson took title to the
Rogers property in the name of Kincaid, and within a short
time traded it for real property in Glendale.

The $16,000 note due two years from date was assigned
in February, 1928, to a Mrs. Andrews, who gave in ex-
change therefor residence property in San Diego. Mrs.
Andrews brought an action against certain of the defendants
herein which was compromised before trial.

The $16,000 note due one year from date, on December 5,
1928, was transferred to plaintiff herein, Lillian E. Evans,
in exchange for her real property in San Diego, consisting
of a building with several stores and apartments and worth
$16,000 over arid above all encumbrances. The exchange
was consummated on April 5, 1928, through an escrow in
the office of a title insurance company in San Diego.
Plaintiff was induced to make the exchange in reliance on
false and fraudulent representations made by defendant
Fred A. Newby, also known as Albert Newby. Newby
falsely represented that’ the ranch had recently been pur-
chased by a millionaire at a price of $135,000, and that
the purchaser had paid $25,000 in cash, turned in other
real property, and for the balance executed the note and
deed of trust for $45,000, which was seeured by a first lien,
and the two $16,000 second lien notes, one of which was
being offered to plaintiff. It was represented that the
owner of the ranch was in poor health and could not be
seen; that the climate of Riverside County where the ranch
was situate was beneficial to the asthmatic condition from
which he suffered; that he had already spent large sums in
improving the ranch, and contemplated making further ex-
penditures; that a large acreage was planted in lemons,
and that the proceeds of the lemon crop alone would be
sufficient to pay the note which was offered to plaintiff.
In fact, a small acreage was planted in lemons, and the

481

ranch was in such condition that the county horticultural
commissioner served notice to abate black and red scale,
which infested the trees, as a nuisance.

It was further falsely represented that the purchaser of
the note for $45,000 secured by the first decd of trust was
Rogers, the silverware king (obviously intended to connote
a connection with the Rogers Bros. company well known
manufacturers of silverware), and that he had made a
thorough investigation of the ranch prior to his purchase
ot the $45,000 note and had received a bank appraisement
of $97,000; that by reason of the wealth of the owner of the
ranch the note offered to plaintiff would be paid promptly
at its maturity on December 5, 1928, and was ‘‘as good as
ecash’’, as Mrs. Andrews, the holder of the $16,000 note due
after the note offered plaintiff would be required to protect
plaintiff in order to preserve her own security. In substan-
tiation of these representations there was exhibited to plain-
tiff a duplicate of a certificate, dated December 30, 1927,
guaranteeing title to the ranch in the sum of $104,000,
which Gibson had procured and delivered to Newby.

No payments whatsoever were made on either of the
$16,000 notes, and the only payment made on the $45,000
note, assigned to Mrs. Rogers, was a quarterly payment of
interest due in March, 1928, in the sum of $787.50. Kin-
caid gave O’Donahue the money with which this payment
was made. He claimed that he made this payment for ser-
vices rendered by O’Donahue in inspecting land for him in
Oregon, but this explanation is too inherently improbable
to be given credence. The court below no doubt inferred
that the quarterly interest was paid to preserve the appear-
ance of a bona fide transaction until both $16,000 notes
should be disposed of. Mrs. Rogers subsequently foreclosed.

Appellants contend that the evidence fails utterly
to establish that either John W. Gibson, Grace I. Gibson,
his wife, or Frederick M. Kincaid was a guilty participant
in the fraud which Newby perpetrated on plaintiff. The
trial court, found against this contention, and in our view
could reach no other reasonable conclusion on the evidence
before it. [J Over the objection of counsel for defend-
ants Gibson and Kincaid, the court permitted plaintiff to
introduce evidence as to the transactions with Mrs. Rogers
and Mrs. Andrews, respectively, relating to the $45,000

a

482 [| Ls

note and the second maturing $16,000 note, executed con-.
temporaneously with the note which plaintiff received, and
evidence as io certain transactions involving the ranch which
were had prior to execution of said notes.

The evidence discloses that the exchange with plaintiff
was not an entirely separate and distinct transaction, but
one of a series of successive transactions closely following
each other in time and part of a comprehensive plan for
muleting innocent persons. Where a charge of fraud is
made, evidence of similar transactions is admissible.
(Thompson v. Modern School, etc., 183 Cal. 112 [190 Pac.
451]; Kornblum v. Arthwrs, 154 Cal. 246 [97 Pac. 420];
Liberty Bank v. Nonnenmann, 96 Cal. App. 478 [274 Pac.
568]; Wellnite v. Sacramento Suburban etc. Co., 97 Cal.
App. 51 [274 Pace. 1016, 276 Pac. 154]; Exchange Bank v.
Voss, 149 Fed. 340.) The numerous transactions as to
which the court herein admitted evidence reveal a carefully
designed plan of concealment calculated to make it difficult,
if not impossible, to detect through a maze of manipulation
the participation of the defendants who did not deal directly
with the persons defrauded. The part which each of the
defendants had in the fraudulent scheme can be understood
clearly only by consideration of the several exchanges to-
gether, with reference to what took place both before and
after the exchange with plaintiff Lillian Evans. Acts which
might be deemed equivocal were they viewed in relation to
a single exchange, permit of but one inference when they
are considered in the light of the several successive trans-
actions. A comprehensive account of the entire fraudulent
scheme is also important in assessing exemplary damages.

With these preliminary observations we shall review cer-
tain transactions involving the Granite Hill Ranch prior to
the execution of the note transferred to plaintiff. In 1925,
the ranch was sold to one Van Wickle at probate sale, con-
firmed by the court, for $23,400. A first mortgage for
$18,400 was placed on the property, and notes for the aggre-
gate sum of $31,500, payable to one Stokes and wife, and
secured by a second deed of trust lien, were executed. John
‘W. Gibson and wife, by assignment, became the holders of
said notes and second lien for $31,500. On July 17, 1926,
they gave notice of default, and acting through Z B.
Barker, admittedly a ‘‘dummy’’, foreclosed said deed of

SE 483

trust, bid the property in for $1200, and brought suit for
a deficiency judgment. A trustee’s deed was issued to
Barker on December 7, 1926.

On March 31, 1927, several interdependent escrows involv-
ing the Granite Hill Ranch were closed in the office of a
title insurance company. In one of said escrows the mort-
gage for $18,400, executed by the Van Wickles when they
acquired the property in 1925, was paid and released. Jn
another escrow Barker, who held title to the Granite Hill
Ranch for the Gibsons, executed a deed, dated January 31,
1927, conveying the ranch to Phil D. Rice, who in turn
executed a note for $40,000 and a deed of trust, both dated
February 1, 1927, in favor of Gibson. This deed of trust
constituted a first lien on the ranch.

A deed dated February 8, 1927, executed by Fred A.
Newby as attorney-in-fact for Rice, and conveying the
ranch to John L. Hittson, was also deposited in escrow.
Hittson executed a note and deed of trust in favor of
Rice for $32,000. This instrument, when recorded on
March 31, 1927, constituted a second lien on the ranch.
These several transfers prepared the way for the transaction
in which F. A. Leavitt and wife and A. J. Leavitt and wife
were defrauded.

The Rice-Hittson note for $32,000, together with said
second deed of trust lien, were assigned by Rice, acting
through Newby as his attorney-in-fact, to the Leavitts.
The Leavitts, by deed dated March 18, 1927, and deposited
in escrow with another title company, conveyed to Rice
unencumbered real property in Pasadena designated as the
Fair Oaks Avenue property. Rice, through Newby as his
attorney-in-fact, conveyed the Fair Oaks Avenue property
deraigned from the Leavitts to Z. B. Barker, the same person
who had held title to the Granite Hill Ranch for Gibson.
In addition to the $32,000 second deed of trust note, $10,000
in cash was paid to the Leavitts, which was raised through
a bank loan for which Barker executed a note and first
mortgage on the property deraigned from the Leavitts.
These several instruments, commencing with the release of
the $18,400 mortgage on the ranch and including the power
of attorney from Rice to Newby, were all recorded on
March 31, 1927.

484, | 7

No payments of principal or interest were ever made on
the $32,000 note executed by Hittson to Rice, and assigned
to the Leavitis, nor were any payments made on the $40,000
note executed by Rice in favor of Gibson, which was se-
eured by first lien on the Granite Hill Ranch. Said note
and first deed of trust lien were assigned by Gibson to
Kincaid, who recorded a notice of default on May 20, 1927,
less than two months after the closing of the escrows on
March 31, 1927. Kincaid received a trustee’s deed to the
ranch on October 4, 1927. That he was acting for Gibson
in causing the property to be sold under the deed of trust
is an admitted fact.

The Leavitts thereafter brought an action against Gibson,
Kincaid and others, claiming that they had been victims
of a fraudulent scheme similar to that which plaintiff Evans
alleges herein. They recovered judgment for $35,000 actual
damages, and $25,000 exemplary damages. Said action is
now pending in this court upon an appeal taken by certain
of the defendants. The comments we here make upon the
evidence introduced in the instant action as to the Leavitt
transaction are not for the purpose of prejudging the appeal
in the action brought by the Leavitts, but we are con-
sidering said evidence for its relevancy in determining ques-
tions of fact herein. The appeal in the Leavitt suit will
be determined in due course on its own record.

The evidence strongly points to the fraudulent character
of the Gibson-Rice-Hittson-Leavitt transactions. The Rice
conveyance to Hittson, by Newby as attorney-in-fact for
Rice, was not a bona fide transfer. To interrogatories pro-
pounded to him, Hittson answered that at the request of one
MeCann, whom he understood to be Kincaid’s father-in-law,
he became the maker of the note and deed of trust for
$32,000, and executed a deed conveying land owned by
him in Texas, and worth approximately $300, to Rice. No
claim is made that Hittson gave any ‘other consideration for
the transfer to him of the Granite Hill Ranch. It is ap-
parent that the deed to the Texas land was placed in the
escrow to give the aspect of a bona fide exchange. Hittson
was never on the Granite Hill Ranch and was worth not
more than $1,000, he testified, when he executed the note
for $32,000, which he had no intention of paying. On June
18, 1927, he executed a quitclaim deed conveying the

SE 485

ranch to James L. O’Donahue, the same person who figures
in the later transaction, and this deed was recorded on
June 15, 1927.

The conclusion is virtually inescapable that the transfer
from Gibson to Rice was not a bona fide conveyance. Rice
was described by witnesses as a young man from the east
who was touring California. He executed the note and
deed of trust for $40,000, dated February 1, 1927, person-
ally, but the Rice-Hittson deed, dated February 8, 1927,
and the Rice-Barker deed of March 18th, by which the
Leavitts’ Fair Oaks Avenue property was conveyed -to
Gibson’s agent, Barker, were executed by Newby, as attor-
ney-in-fact for Rice under a power of attorney dated Feb-
ruary 2, 1927, and recorded with the other instruments on
March 31, 1927. The explanation given for this was that
Rice had left for the east.

The deposition of John W. Gibson, taken before trial,
and the transcript of his testimony in the Leavitt v. Gibson
action, were introduced herein. Gibson claimed that the
transfer to Rice was a bona fide sale for $60,000, with a
payment of cash in the sum of $20,000, and the execution
of the note and deed of trust for the balance. However,
he admitted that Rice did not make a cash payment in
‘any sum whatsoever, but he himself paid $19,600 into
escrow, which was used to discharge the mortgage for
$18,400 which had existed prior to Gibson’s acquiring the
ranch. By deed recorded concurrently with the other in-
struments, Rice conveyed the property deraigned from the
Leavitts to Barker, and Barker, who was admittedly acting
for Gibson, executed a note and mortgage on said property
to raise $10,000 from a bank, which sum was paid to the
Leavitts. The loan papers were also recorded on March
81st. To follow the tortuous chain still further, the prop-
erty deraigned from the Leavitts was part of the considera-
tion given for the transfer by Gertmanian and wife of
Pasadena property which subsequently reached Gibson’s
name through a further intermediary, one Anna Jackson,
mother-in-law of Newby.

The claim, reiterated and emphasized throughout this ap-
peal, is that the sum of $19,600, used to discharge the pre-
existing $18,400 mortgage, was loaned by Gibson to Rice,
and that Gibson took as security title to the Leavitts’ prop-

486 a —

erty in the name of Barker, and permitted Rice to raise
the $10,000 paid the Leavitts through a mortgage executed
by Barker. The $20,000, or $19,600, cash paid to Gibson
by Rice for the conveyance of the ranch was the money
which Gibson himself had loaned to Rice. The court re-
jected this unconvincing explanation.

The final step in the fraud perpetrated on the Leavitts
was accomplished through the foreclosure of the first deed
of trust lien for $40,000 executed by the dummy Rice in
favor of Gibson, which revested title to the ranch in Gibson
(in the name of Kincaid), free of the lien of the $32,000
second deed of trust held by the Leavitts. The trustee’s
deed to Kineaid is dated October 4, 1927. The first steps
were taken on December 5, 1927, to the accomplishment of
a similar fraudulent scheme, in which not one fraudulent
deal, as in the case of the Leavitt exchange, but three
separate fraudulent exchanges were made. It is contended
on this appeal that the evidence fails to show Gibson’s and
Kincaid’s fraudulent connection with the deal with plaintiff
Evans. This contention must be rejected, as was the similar
contention advanced as to the Rice-Hittson-Leavitt trans-
action.

|| It is urged that the evidence does not show that.
Gibson authorized Newby to make the false representations
as to the financial responsibility of O’Donahue and the
value of the Granite Hill Ranch upon which plaintiff Evans
relied in making the exchange, or had any knowledge that
Newby was making said statements. The conclusion is
inevitable that the transaction whereby O’Donahue appeared
to be vested with title to the ranch and to execute notes
and deeds of trust thereon for sums far exceeding the
value of the ranch was not a bona fide transfer, but had
for the express purpose of creating said notes and deeds of
trust to be used for the express purpose for which they
were used—to accomplish flagrant frauds. Gibson himself
took the three notes and two deeds of trust to O’Donahue,
Kineaid’s brother-in-law, for execution on December 5,
1927, and at the same time procured O’Donahue to execute
and deliver to him a deed conveying the ranch to Gibson’s
daughter. On the following day he took the deed from
Kineaid to O’Donahue and the two deeds of trust to the
recorder’s office. The deed to Gibson’s daughter was not

SU 481

recorded. Gibson was enabled to dispose of the three notes
through the activities of Newby. He knew that these
notes, executed by a financially irresponsible maker for
amounts far exceeding the value of the ranch, in a purely
fictitious transaction, could not be disposed of without
the practice of fraud and deception. He cannot escape
liability on the pretext, inherently incredible, that he did
not authorize or sanction the false representations in fact
made. Gibson was engaged in buying and selling real
estate, investments and securities on a large scale, and left
an estate appraised at more than $788,946. Newby had
acted for him in a number of transactions over a period
of years.

HM The executrices of Gibson’s estate also sought to
exonerate him on the ground that the note transferred to
plaintiff Mrs. Evans was not the property of Gibson, but
awarded by him to Kincaid for legal services. The trial
court by its findings as amended found against this transfer.
Even if said note was the property of Kincaid, Gibson
was active in causing the instruments of fraud to be ercated
relating to land owned by him, and he could not escape
liability when the note was used as intended simply because
it may have represented Kincaid’s share.of the profits of the
venture.

The appealing defendants also sought to establish that
the transactions by which they disposed of the two $16,000
notes were with Newby as principal on the other side, and
that they neither directly nor through the agency of Newby
or any other person dealt with either Mrs. Andrews or
Mrs. Evans. The trial court by its findings rejected this
claim. Said defendants urge that Newby on his own ac-
count acquired title to the Andrews’ and Evans’ property,
and that the exchange of the second maturing $16,000 note
was for a third deed of trust note for $10,000 on the
Andrews property executed by Newby, and the exchange
of the $16,000 note due one year from date was for a
$15,000 fourth deed of trust note on the Evans property,
executed by Anna Jackson, a dummy for Newby. The sub-
sequent transactions with reference to the Evans and
Andrews property strongly indicate that the Evans and
Andrews transactions were conducted by Newby on behalf
of Gibson, or Gibson and Kincaid, and that the $10,000

488 es —

and $15,000 notes were sham notes. Gibson actually viewed
all the properties involved. Disputes also arose out of
notes and deeds of trust created on property derived through
the Evans and Andrews exchanges by defendants.

The evidence abundantly establishes Kincaid’s fraudulent
connection with the venture. Before he was admitted to the
bar he was employed by a title insurance company as an
escrow examiner and escrow agent. He acted as Gibson’s
attorney throughout the period of the transactions involving
the Granite Hill Ranch. He had been on the ranch a
number of times and was familiar with land values. Upon
Gibson’s death he became the attorney for the executrices
of his estate. Kincaid prepared and was grantor in the
deed of December 5, 1927, transferring the ranch to
O’Donahue, his brother-in-law, and also prepared the notes
and deeds of trust executed by O’Donahue, through whom
the sham transaction of December 5, 1927, was had, and
the deed of December 5th from O’Donahue to Thelma
Gibson. Kincaid was the payee of said notes, and there-
after assigned them without recourse, and gave written
escrow instructions by which they were exchanged for
other, property. O’Donahue, Kincaid’s brother-in-law, was
also grantee in the Hittson deed of June 13, 1927, and
Kincaid testified that he advised to whom said deed should
run. Kincaid claimed to be the owner in his personal right
of the $16,000 note maturing one year from date, as com-
pensation for services rendered to Gibson, and Gibson testi-
fied that Kincaid had represented him in the Andrews
exchange.

In response to a letter written by one Williams, a real
estate broker who participated in the transactions with
plaintiff Evans and with Mrs. Andrews, Kincaid replied,
concerning his brother-in-law: ‘I wish to advise that in
my dealings with Mr. O’Donahue I found him to be de-
pendable and I believe him to be possessed of unusually
good moral character. In the transaction in which the
note which your friend contemplates purchasing was de-
livered, no inquiry was made by the undersigned concerning
Mr. O’Donahue’s general affairs, owing to the fact that
reliance was upon the security rather than any such gen-
eral assets. My coritact with Mr. O’Donahue is not such
as will enable me to give you any helpful information con-

a ee 489

cerning his business generally, but I am pleased to report
to you my very favorable impression as to his moral
charac’

Kincaid also participated in the Leavitt transaction. As
assignee of Gibson he caused the ranch to be sold under the
$40,000 Rice deed of trust, and at the sale purchased on
behalf of Gibson. In negotiations with the Leavitts he
suggested that the foreclosure proceedings would be aban-
doned if the Leavitts, who held the second lien, would
accept a deed to the ranch, pay several thousand dollars
on the Rice note and guarantee the balance.

HI Appellant executrices contend that much of the tes-
timony of plaintiff and of certain other party witnesses is
inadmissible against them under section 1880, subdivision 8, of
the Code of Civil Procedure. Said section provides that par-
ties cannot be witnesses upon a claim or demand against the
estate of a deceased person as to any matter or fact occur-
ring before the death of such deceased person. Excluding
the evidence which may be incompetent, sufficient remains
to sustain the judgment against the executrices. The depo-
sition of Gibson taken in the case before trial under section’
2055 of the Code of Civil Procedure, was introduced, and the
transeript of his testimony taken in the Leavitt v. Gibson
action was introduced herein pursuant to stipulation. Said
deposition and transcript in themselves provide damaging
evidence against Gibson. Furthermore, there is some au-
thority that the adverse party may render himself compe-
tent by introducing the deposition of the decedent taken
before his death. (Jones on Evidence, 3d ed., p. 1211.)

The judgment must be affirmed in so far as it awards
compensatory damages to plaintiff. [J But the award of
$5,000 exemplary damages against all defendants cannot
be sustained as to the defendant executrices. An action
in tort’ to recover compensatory damages for injury to
property, rather than to the person, survives, but after the
death of the defendant tort-feasor exemplary damages can-
not be awarded against his estate or his executrices. Such
damages are allowed ‘‘in addition to actual damages’,
and ‘‘for the sake of example and by way of punishing the
defendant”’. (Sec. 3294, Civ. Code.) In Pacific etc. Co. v.
Packers’ Assn., 188 Cal. 632, 6388 [72 Pac. 161], it is
declared that ‘‘punitive damages are given as punishment

490 a Ls

beyond what a plaintiff has actually suffered”. Since the
purpose of punitive damages is to punish the wrongdoer
for his acts, accompanied by evil motive, and to deter him
from the commission of like wrongs in the future, the
reason for such damages ceases to exist with his death. It
is true that the infliction of punishment serves as a deter-
rent to the commission of future wrongs by others, as well
as by the wrongdoer, but punitive damages by way of
example to others should be imposed only on actual wrong-
doers.

The author of an annotation in 65 A. L. R. 1049 finds
the rule well settled that punitive or vindictive damages
cannot be awarded against the estate of the tort-feasor.
(Sullivan v. Associated Bill-posters, etc., 6 Fed. (2d) 1000
[42 A. L. RB. 503]; Lane v. Schilling, 180 Or. 119 [279
Pac. 267, 65 A. L. BR. 1042]; Morris v. Duncan, 126 Ga. 467
[54 8. BE, 1045, 115 Am. St. Rep. 105]; Sheik v. Hobson,
64 Towa, 146 [19 N. W. 875]; Hewlett v. George, 68 Miss.
703 [9 So, 885, 13 L. R. A. 682]; Rippey v. Miller, 33 N. O.
247; Wright v. Donnell, 34 Tex. 291.) The annotation cites
no cases announcing the contrary rule, counsel in the
appeal herein have cited none, and we have found no con-
trary authority. In Morris v. Duncan, supra, the rule is
thus stated:

“‘Damages which are given merely as a punishment to
deter the wrongdoer from a repetition of the offense clearly
have no reference to compensation for the wrong inflicted.
The award of such damages against the estate of a wrong-
doer no longer in life must fail of its object, and could
not therefore be allowed.”

There are other applications of the rule that punitive
damages may be visited only upon the actual wrongdoer in
proportion to his guilt. A principal, although Liable to
make compensation for injuries done by his agent within
the scope of his employment, cannot be held for exemplary
damages unless he is personally implicated. (Warner v.
Southern Pacific Co., 113 Cal. 105 [45 Pac. 187, 54 Am. St.
Rep. 327); 8 Cal. Jur. 870.) Exemplary damages may be
awarded against several joint tort-feasors in different
amounts, depending upon the degree of culpability, but
compensatory damages cannot be thus apportioned. (Lhom-

a es 491

son v. Catalina, 205 Cal. 402 [271 Pac. 198, 62 A. L. R.
235].) In Lane v. Schilling, 180 Or. 119 [279 Pac. 267, 65
A. L. R. 1042], it is held that the receiver of an insolvent
bank is not liable in punitive damages for malicious acts of
officers committed before he assumed control.

In Leavitt v. Gibson, to which we have heretofore re-
ferred, now pending in this court, both parties had pre-
sented their evidence and rested prior to the death of
Gibson, and a certain minute order had been made, We
do not here decide the question involved in that case as
to the power of the trial court under such circumstances to
preserve the plaintiff’s right to exemplary damages by entry
of judgment nunc pro tunc as of a date antedating Gibson’s
death. In the instant case Gibson died after commence-
ment of the action but prior to trial, and his executrices
cannot be held liable for exemplary damages either directly
or by nune pro tune entry.

HJ The appellants contend that the judgment includes
interest erroneously computed. One defrauded in the ex-
change of property is entitled to recover the difference
between the actual value of what he received and the value
it would have had if it had been as represented. The note
received by plaintiff was found to be worthless. Appellants
eontend that if it had been as represented it would have
been paid at maturity, on December 5, 1928, one year from
its date, and that its represented value is its due date value
—$16,000, plus interest for one year at eight per cent,
the rate fixed in the note. The court below correctly al-
lowed interest at the rate of eight per cent up to the date
of the findings and judgment, September 26, 1931. It does
not follow that the note would have been paid at maturity
if the representations concerning it had been true. Notes
executed by solvent makers are frequently permitted to run
beyond their due datcs. In fact the note herein was not
paid. In this situation if it had been as represented its
value would have included interest beyond its maturity
date, as provided for in the note.

‘We find no error requiring a reversal of the judgment.
Tf the second deposition of Newby as a matter of law was
inadmissible, said deposition is not necessary to sustain the
judgment against appellants,

es

The judgment is modified by eliminating the award of
exemplary damages against the defendant executrices. As
thus modified it is affirmed, each party to bear his own
costs on appeal.

[S. F. No. 14785, In Bank—April 3, 1934.]

ROMUALDO LUCCI et al, Respondents, v. UNITED
CREDIT AND COLLECTION CO. (a Corporation),
Appellant.

(Mrs.) E. B. Cassidy for Appellant.

A. Don Duncan for Respondents.

THOMPSON, J.—The defendant United Credit and Col-
lection Company has appealed from a judgment quieting the
title of the plaintiffs Romualdo and Caterina Lucci to the
premises in dispute free and clear of all encumbrances, ex-
cept a mortgage held by the San Francisco Bank as security
for the payment of a note in the sum of $2,500; decreeing

5,

that the defendant has no right, title, interest, claim or lien
of any nature in or to the premises, and further, that the
execution, the sheriff’s sale based thereon and the sheriff’s
certificate of sale made to the United Credit and Collection
Company are invalid and void and that the declaration of
homestead made by the plaintiffs was valid, that all the
statements made therein were true and that the declarants
had fully complied with the requirements of the homestead
law; and enjoining the defendant from asserting any claim,
lien or interest in or to the premises.

This action was commenced October 16, 1931, by Romualdo
and Caterina Lucci to quiet title to a lot on Grove Street
in San Francisco and to remove a cloud from their title
consisting of execution proceedings and a sheriff’s sale to the
United Credit and Collection Company. On December 2,
1927, the United Credit and Collection Company brought an
action against the respondents on a claim for goods sold to
Lucci and an attachment was levied upon the property in
dispute, which was then held in joint tenancy by Romualdo
Lucci, ‘Caterina, his wife, and Frank and Carmelina Oliva,
his daughter and son-in-law. On December 14, 1927, the
Olivas made a deed conveying to Romualdo and Caterina
Lmncci ‘‘all that certain lot, piece or parcel of land’, par-
ticularly describing it. On the same day Romualdo and
Caterina Lucci executed a declaration of homestead, in which
they stated that the property was community. Both instru-
ments were recorded on the following day, the deed from the
Olivas at 9:34 A. M., and the declaration of homestead at
9:45 A.M. Mr. and Mrs. Lucei defaulted in the action by
the United Credit and Collection Company and, on January
24, 1928, judgment was entered against them for $467.22,
execution being levied on January 26, 1928. The sheriff’s
‘sale was held March 6, 1928, the United Credit and Collec-
tion Company purchasing for the sum of $511, and the
sheriff’s return being recorded April 27, 1928. The sheriff’s
deed was made on March 8, 1929, and recorded Mareh 14,
1929. It was stipulated at the trial that these various pro-
ceedings were taken as required by law and were valid in
form.

Appellant’s brief is voluminous and urges a great many
grounds for reversal, in so many of which there is so little
merit that the appeal borders upon the frivolous. It is

eee ll

unnecessary to burden this opinion with a discussion of all of
the points which it has attempted to make,

HE Complaint is made of the action of the trial court in
refusing to allow to the defendant, upon the expiration of
the original ten-day extension of time, an additional twenty
days within which to plead to the complaint. Appellant in-
sists that it was not allowed a reasonable time in which to
prepare its defense and make a satisfactory investigation
and that, on that account, important evidence was not dis-
covered and important witnesses were not located until after
trial, and that this action of the trial court prevented de-
fendant from having a fair trial and amounts to such irregu-
larity of procedure as to constitute an abuse of discretion
and also was such accident and surprise as could not have
been guarded against by the use of due diligence for the
reason that the defendant was entitled to believe that addi-
tional time would be granted upon a proper showing. Sec-
tions 473 and 1054 of the Code of Civil Procedure are cited
in support of this contention. These sections provide that.
an extension ‘‘may’’ be allowed by the trial court ‘‘in
furtherance of justice’? and ‘“‘upon good cause shown’’. Ob-
viously, the further extension of time to plead to the com-
plaint rested in the sound diseretion of the trial court. Not
only has no abuse of discretion been shown but it would
appear that, under the circumstances of this case, the trial
court acted correctly in denying further time. The record
shows that the holder of the mortgage was threatening fore-
closure unless the title could be cleared and that the statute
of limitations on the mortgage expired about a month from
‘the trial date. Plaintiffs’ interest in the property was being
jeopardized by the delay. The date of trial, November 13,
1931, was stipulated to by the parties, although appellant
seeks to avoid the effect of this stipulation by saying that it
was entered into because of the remarks of the court and the
threats of counsel for the plaintiffs that the bank would fore-
close and no one would get anything. The record also
shows that during the trial counsel for defendant agreed that
the plaintiff was “‘quite justified in bringing it on at an
early date’’.

[The contention is made that Romualdo and Caterina
Lucci had not such an interest in the premises as would
entitle them to declare a homestead thereon for the reason

A

that they held in joint tenancy with the Olivas. However,
the record shows that the Olivas had conveyed their interest
to the Luccis prior to the declaration of homestead. Whether
the Luccis thereafter held as joint tenants or tenants in
common is immaterial. (Swan v. Walden, 156 Cal. 195 [103
Pac. 981, 134 Am. St. Rep. 118, 20 Ann. Cas, 194].)

The argument that the lien of the attachment is not
defeated by the declaration of homestead prior to judgment
is answered to the contrary by Jacobson v. Pope & Talbot,
214 Cal. 758 [7 Pac. (2d) 1017].

HM It js also claimed that the deed from Frank and
Carmelina Oliva to Romualdo and Caterina Lucci, having
been made for the sole purpose of enabling the latter to
declare a homestead on the property, is void as against the
attaching creditors. It has been held by this court that the
principles of fraudulent conveyances do not apply to declara-
tions of homestead. (Gray v. Brunold, 140 Cal. 615, 621 [74
Pac. 303].) It is said in Schmidt v. Denning, 117 Cal. App.
36, 39 [8 Pac. (2d) 322]: ‘‘The fact that the defendants
filed a declaration of homestead to hinder and delay their
ereditors is not actionable. That result is to be expected
from the very existence of a statute allowing the creation of
homesteads. (Fiétzell v. Leaky, 72 Cal. 477, 483 [14 Pac.
198].)’? And, in Marelli v. Keating, 208 Cal. 528 [282 Pac.
793], this court said: ‘‘The object of the homestead law is
to protect the homesteader and those dependent upon him
or her in the enjoyment of a domicile not exceeding $5,000,
and to this end a liberal construction of the law and facts
will be indulged by the courts. When this object has been
accomplished courts will not suffer this salutary statute to
be used as a shield behind which those who would deal
unjustly with creditors may find refuge.’’ Since the law
protects and recognizes as legitimate the purpose of Lucci in
making his declaration of homestead it is difficult to see how
the action of the Olivas, who merely assisted in that purpose
and who owed no duty to the United Credit and Collection
Company, can be characterized as fraudulent. The case
does not go beyond the object of the homestead law as stated
above. Any excess value over $5,000 could have been
reached under the procedure authorized by sections 1245 and
1259 of the Civil Code, but concededly no such proceedings
were taken by the judgment creditor.

SS

The question of laches and estoppel we will dismiss as not
having been pleaded. [J But it is asserted that the plain-
tiffs are not entitled to the equitable relief of a judgment
quieting their title and removing the cloud of the execution
sale without first doing equity by paying the amount of the
appellant’s judgment. It is held to the contrary in Price v.
Central Sav. Bank, 62 Cal. App. 583 [217 Pac. 800], and
Graham v. Hunt, 119 Cal. App. 586 [7 Pac. (2d) 186]. We
are of the opinion that this is the proper rule to follow. A
homestead exemption is allowed by law. Consistency de-
mands that it be protected or the purpose of ‘‘this salutary
statute’’ is not accomplished.

On motion for new trial made on the ground, among
others, of newly discovered evidence, appellant filed affi-
davits of its counsel and Alec C. Stoddard, who with his wife
held the property under a trust deed executed by Romualdo
and Caterina Lucci and Frank and Carmelina Oliva to secure
the payment of the balance of the purchase price to their
grantors. By these affidavits the appellant sought to show
that a ‘‘duplex’’ dwelling-house and a single dwelling-house
separated by a yard and having three separate street num-
bers were located upon the homesteaded premises and that the
declarants lived only in one portion of the ‘‘duplex’’ despite
the fact that the declaration stated that they lived on the -
premises described, with all improvements thereon; the ‘‘im-
provements numbered 718 Grove Street’’, and that the prem-
ises ‘‘together with the dwelling house thereon’’ were selected.

. and claimed as a homestead. It was also sought to be shown
by the affidavit of Stoddard that the transfer of the interest
of the Olivas was merely colorable and that as a matter of
fact there was no actual change of ownership. It is alleged
in the affidavit of appellant’s counsel that it was necessary to
search the record and locate witnesses, but no facts are
stated showing that reasonable diligence was used in en-
deavoring to discover the evidence prior to the trial, nor is
any Satisfactory explanation given why it was not possible
to discover that the improvements upon the property con-
sisted of a ‘‘duplex’? and a single dwelling and that the
declarants occupied only a portion of the ‘‘duplex’’. In
fact, it is attempted to place upon the trial court, because of
its refusal to make additional extensions of time, the entire

498 — |

responsibility for the failure of appellant to present these
facts at the time of trial.

The action of the trial court in denying a new trial will be
sustained except where an abuse of discretion is shown
(Maxwell Hardware Co. v. Foster, 207 Cal. 167 [277 Pac.
327]; Parker v. Southern Pac. Co., 204 Cal. 609 [269 Pac.
622]; Fresno Estate Co. v. Fiske, 172 Cal. 583 [157 Pac.
1127]), and no abuse of discretion has been made to appear.

The evidence offered on the trial sustains the findings and
the judgment. [J The affidavits used in the trial court
only upon a motion for a new trial cannot be considered on
appeal in determining the sufficiency of the evidence to
support the findings. (Gallatin v. Corning Irr. Co., 168 Cal.
405, 422 [126 Pac. 864, Aun. Cas. 1914A, 74].) The judg-
ment is affirmed.

Shenk, J., Seawell, J., Curtis, J., Preston, J., Langdon, J.,
and Waste, C. J., concurred.

[8. F. No. 14766, In Bank—April 9, 1934.]

BANKS J. WILDMAN, Respondent, v. MOE-BRIDGES
COMPANY (a Corporation), Appellant.

ere 499

Wright & Wright & Larson for Appellant.

C. H. Sooy for Respondent.

PRESTON, J.—Defendant, during the years 1923, 1924
and 1925, was engaged in the manufacture and sale of
household fixtures and hardware, with home office at Mil-
waukee, Wisconsin, and plaintiff was sales manager for its
western division, or San Francisco branch, under contract
to receive a stipulated monthly compensation, plus ten per
cent of the net profits of the branch, payable at the end of
each year. In the matter of arriving at a satisfactory cost
basis for merchandise sold by the branch, upon which might
be computed the 10 per cent net profit, there soon arose a
controversy of long duration, which culminated in the bring-
ing of this action by plaintiff to recover sums alleged to be
due him from defendant.

The sole issue in the cause was clearly defined by a stipu-
lation of the parties which provided that if the court found,
in accordance with the contention of plaintiff, that the profits
of said branch, during said period and under the agreement
between the parties, should be based upon the factory cost
of the merchandise sold by the branch, excluding from said
factory cost specified items of indirect, general and adminis-
trative expenses of the principal, central, main offices of
defendant at Milwaukee, not incurred by the branch (here-
inafter referred to as ‘‘items’’), then, according to a stipu-

500 — 7

lated computation, there would be due and payable to plain-
tiff upon said basis the sum of $6,811.50, for which he should
have judgment, with interest thereon. The stipulation
further provided that if the court found, in accordance with
the contention of defendant and under the agreement be-
tween the parties, that the profits of said branch should be
based upon the factory cost of the merchandise sold by the
branch during said period and that said items should be
included in or added to said factory cost, or included in the
deductions from the gross profits of the branch, then, accord-
ing to a stipulated computation, defendant would be entitled
to judgment dismissing the action.

Upon the trial various documents and correspondence
between the parties over the period involved were introduced
in evidence; plaintiff testified and defendant offered deposi-
tions taken prior to trial, together with additional documen-
tary evidence. On the above issue, the court found that in
April, 1923, defendant entered into an oral agreement with
plaintiff, thereafter partially reduced to writing by exchange
of letters between the parties, under which the profits of
said branch were to be based on the prime factory cost of
merchandise sold by it, excluding therefrom said items.
Judgment in accordance with this finding, and following the
terms of said stipulation, was thereafter entered for plaintiff
and defendant appealed.

Appellant contends that we are required to interpret
the terms of its contract with respondent to determine whether
the provisions for payment of said 10 per cent net profit
contemplated charging the branch, in computation thereof,
with said items, as part of the cost of the goods sold by it.
In this connection, appellant claims that all the terms of the
contract, as orally agreed upon by the parties, were later in-
corporated in confirmatory letters exchanged by them, which
merely stated that respondent would receive a sum equivalent
to 10 per cent of the net profits of the branch, without speci-
fying upon what basis said profits were to be computed,
In this situation, appellant urges, we must give the term
“net profits’’ its usual definition and significance, viewed in
the light of the interpretation which the parties, during their
conduct of the business, placed upon it and, so doing, we
must determine this appeal in accordance with appellant’s
claims.

sou

Respondent asserts that no question of interpretation of
the contract, or of said term, is involved on this appeal; that
the sole question here is whether the evidence sufficiently
supports the findings and judgment. He contends that
the issue in the court below was purely one of fact, to wit:
Did the parties agree that the merchandise should be charged
to the branch at prime factory cost only, or did they agree
that to the latter cost could be added the aforesaid items?
What was the agreement between the parties? Was it par-
tially or fully reduced to writing? Is there evidence to
support the conclusion of the court below on these questions
of fact? .

Respondent’s statement of the case seems to be correct.
Hl As above stated, the court found that appellant entered
into an oral agreement with respondent, which was thereafter
partially reduced to writing by exchange of letters between
them. The evidence abundantly supports this, and all other
findings and the judgment, as will now be shown.

Appellant company was organized in 1919. In 1920 re-
spondent undertook pioneering work for it on the west coast
at a minimum compensation by representing it along with
other companies. Considerable business was developed, and
in 1922 the San Francisco branch was established, with re-
spondent as its manager, devoting himself exclusively to ap-
pellant’s business under a five-year written contract of em-
ployment, executed January 1, 1922, which provided that he
should receive, in addition to a drawing account, compensa-
tion based on a straight monthly commission of 5 per cent
on total net shipments to the territory in excess of $12,000
a month. This contract proved profitable for respondent
but burdensome to appellant; hence in 1923 respondent was
called to the home office and was asked to and did surrender
it for the contract here involved, the terms of which were
reached by oral agreement during his stay at said home
office. After his return to San Francisco he received the
letter of April 3, 1923, which, appellant alleges, sets forth
all of the terms of the new contract of employment. We
cannot concur in this view as the letter does not purport
to have any such scope. It states:

“|. . this will confirm the new arrangement accepted as
mutually satisfactory and the following points are enumer-
ated here merely as a matter of record to preclude any

502 a |

possible misunderstanding in the future.’’ It then enumer-
ates certain points: That the new arrangement is effective
April 1, 1923; that respondent will return the old contract
for cancellation; that he will receive a flat weekly salary of
$100, plus automobile allowance, and that he will also receive
a “sum equivalent to ten per cent of the net profits earned
by the San Francisco Branch, this being payable in a lump
sum after ... December 31st each year’’. Respondent did
not reply to this letter until May 17th, when he wrote that
the new arrangement ‘‘looked all right’’; that he did not
like the idea of not receiving his profits until the end of the
year, but supposed it was all right. -

The tenor of these letters indicates clearly that no attempt
was made therein to make a complete statement of the terms
and working arrangements of the oral agreement of the par-
ties. This view is confirmed by an examination of the later
correspondence, which is quite voluminous. It shows that
appellant tried first one method and then another of figuring
the cost basis for merchandise shipped to the branch, at first
excluding but later including the aforesaid items, and that
the result of these frequent changes was that although re-
spondent greatly increased the volume of branch business,
his profit grew smaller instead of larger, or vanished alto-
gether. Furthermore, as he received an accounting of the
net profit due him, if any, only at the end of the year,
changes in appellant’s methods of computation and account-
ing were more or less concealed from him over long periods,
and correspondence with respect thereto was intermittent and
unsatisfactory because of absorption of his time by pressure
of the rapidly expanding branch business. In other words,
there is no doubt that appellant imposed upon respondent’s
trust and loyalty and left him somewhat in a state of mystifi-
cation relative to accounting at the head office, until at last
his suspicions that he was being mistreated were thoroughly
aroused and he protested vigorously and expressed his indig-
nation at having been induced to surrender a profitable con-
tract for one rendered uncertain and apparently subject to
control by appellant through manipulation of or changes in
its accounting system.

The trial court was abundantly justified in believing re-
spondent’s testimony that one of the terms of his oral con-
tract with appellant, agreed upon during his visit to the

ee 508

home office, was that the branch was to be charged only with
prime factory costs (cost of labor to appellant in the manu-
facture of goods plus 135 per cent), and that the said
“items”? were not to be added thereto.

We are satisfied that the findings and judgment have
ample support in the evidence.

The judgment is affirmed.

Seawell, J., Langdon, J., Curtis, J., Shenk, J., Thompson,
J., and Waste, ©. J., concurred.

[S. F, No. 14895. In Bank—April 9, 1934.]

In the Matter of the Estate of HANNAH CRONVALL, De-
ceased. MARY HALEY et al., Appellants, vy. ALFRED
CRONVALL, Administrator, etc., Respondent.

Peter S. Sommer, Nat Schmulowitz and Tobin & Tobin for
Appellants.

504 Es 7

Walter J. Brown for Respondent.

PRESTON, J.—Appeal from order and decree of final
distribution, finding the entire estate of Hannah Cronvall,
deceased, to be community property and distributing it to
respondent Alfred Cronvall, the husband of said decedent
and administrator of her estate, thus overruling the objec-
tions of appellants, two surviving nieces, who seek to share
in the distribution of said estate as separate property of
decedent.

The estate is located at 227 Corbett Avenue, San Fran-
cisco, and consists of a lot, and house thereon, valued at
$3,000, and household furniture valued at $100. In 1909
the lot was purchased in decedent’s name for about $900.
Respondent, by trade a carpenter, constructed a dwelling
thereon which was, until the passing of decedent in 1931,
the family home of this husband and wife.

HM The sole question here presented is that of sufficiency
of the evidence to sustain the finding that the entire estate
was community property and not separate property. Appel-
Jants claim that the evidence established an uncontroverted
disputable presumption that said property was separate
property of decedent by reason of the fact that it was
purchased in her name; at the same time respondent deeded
to her any interest he might have in it, and the purchase
price was paid from a bank account, also in decedent’s name,
wherein had been mingled, with her separate funds exceed-
ing the amount of such purchase price, community funds
of a less sum than said purchase price.

We have reviewed the record with care. It supports the
action of the court below and contains evidence which,
though meager, is sufficient to overcome the presumption
raised by the aforesaid circumstances and to establish the
community character of the estate. It is fundamental that
a finding of the court below, supported by sufficient evi-
dence, is binding and conclusive.

The order and decree appealed from is affirmed.

Langdon, J., Curtis, J., Shenk, J., Thompson, J., Waste,
C. J., and Seawell, J., concurred.

Rehearing denied.

[Z. A. No, 14287. In Bank—April 9, 1934.]
HELEN KEMP, Respondent, v. H. L. LYNCH, Appellant.

506 Po 7

Will H. Light for Appellant.

Davis & Thorne for Respondent.

PRESTON, J.—Action by plaintiff, Helen Kemp, to quiet
her title to certain land located in Los Angeles County.
Defendant answered alleging that he had an interest in
said property by virtue of a sheriff’s certificate of sale
issued to him pursuant to execution and sale regularly made
by said sheriff upon a judgment for costs rendered in
defendant’s favor in a will contest entitled: In re the Estate
of Ma Rheinschild, etc., Deceased, No. 124346; further al-
leging that plaintiff ‘‘was a party to said contest proceed-
ings’’, which were regularly had and judgment rendered
therein about July 25, 1932. Defendant also filed a eross-
complaint praying for a decree quieting his title to said
property.

Upon issues so joined the cause went to trial. Plaintiff
showed that in 1920 she had inherited the land in dispute,
which was vacant property and, other than that she had
subjected it to an oil lease, she had from said year been
in continuous possession thereof and had paid all taxes
upon it. Defendant offered in evidence his sheriff’s certifi-
eate, and counsel stipulated that there had been a levy
upon the property under the execution issued upon said
judgment for costs in defendant’s favor in the probate pro-
ceeding. Objection was thereupon interposed to receipt
of the certificate in evidence because it showed that the said
judgment was against one Patricia Rheinschild by her
guardian ad litem (this plaintiff) but said judgment was not
against this plaintiff and could not bind her or affect prop-
erty owned by her. Counsel for defendant admitted that
plaintiff was not named as a party to the probate proceed-
ings, save as guardian for the minor contestant, although she
was personally present at all hearings therein. The court
thereupon sustained the objection to introduction of said
certificate in evidence and thereafter made findings and
gave judgment for plaintiff as prayed, quieting her title to
said property. Defendant appealed.

a a 507

HI The cause has now been submitted to us upon motion
of plaintiff to dismiss said appeal or to affirm the judg-
ment. We have no hesitancy in pursuing the latter course.
There is nothing whatsoever in the record to substantiate
the statement of facts set forth in appellant’s brief, upon
which he bases his several contentions to the effect that this
plaintiff and one Walter Rheinschild were the real parties
in interest in said probate proceeding and made the minor
child their agent to contest the probate of the will of the
decedent; that in rendering judgment for costs in said
matter for this appellant, the court gave judgment, not
against the minor alone, but binding also the real parties in
interest, one of whom was this plaintiff; that in the instant
cause the court erred in not receiving in evidence said
sheriff’s certificate and in not permitting appellant to prove
his contention that although the probate contest was on
record in the name of the minor, this plaintiff and said
Rheinschild instigated it, carried it forward and were the
real parties in interest.

Hl im October, 1933, appellant made an application to
this court, in the form of an affidavit, for permission to
introduce additional evidence, under section 956a of the
Code of Civil Procedure, in support of the above assertions,
which application was continued to be disposed of upon
consideration of the cause on its merits. It will have to be
denied. No proof is offered which was not available to ap-
pellant upon the hearing of this proceeding. Furthermore,
appellant could not prevail here upon evidence affecting
the relationship of the parties to said probate proceeding
and attempting to impeach the judgment rendered therein
because in this cause, and under the issues here joined,
he bases his entire claim to relief upon the certificate of sale
regularly issued to him pursuant to the judgment rendered
in his favor in said probate proceeding. Admittedly, in
said probate contest, appellant did not secure a decree
against this plaintiff, even though he may have been entitled
to it. So far as the record before us is concerned it shows
that appellant offered in evidence only said sheriff’s certifi-
cate of sale, which showed on its face that this plaintiff was
not a party to said probate contest.

508 Le |

The application to introduce additional evidence is denied.
The judgment is affirmed.

Langdon, J., Curtis, J., Shenk, J., Thompson, J., Waste,
©. J., and Seawell, J., concurred.

[S. F, No, 15017. In Bank—April 9, 1984]

WALTER VINZANT ALLEN et al, Respondents, v.
W. L. McCRARY, Appellant.

W. J. Hennessey and Pierre A. Fontaine for Appellant.

Abe P. Leach, Vaughns & Larche, George R. Vaughns
and Frank M. Larche for Respondents.

SHENK, J.—Motion to’ dismiss the appeal or affirm the
judgment.

The appeal is from a judgment for the plaintiffs in an
action to quiet their title to certain real property in Alameda
County.

— 509

The plaintiffs based their claim of title on a deed to said
property executed and delivered to the plaintiff, Walter
Vinzant Allen, by Artee Allen McCrary in October, 1926.
Artee Allen McCrary died in October, 1930. The defendant
W. L. McCrary is the administrator of her estate, and is
sued in that capacity as well as in his individual capacity.

The defendant filed a cross-complaint claiming to be the
owner and entitled to the possession of said property. His
claim to the property was based upon its alleged community
character. The plea of res judicata establishing the sepa-
rate character of the property was interposed as part of
the plaintiffs’ answer to the cross-complaint. Over the ob-
jection of the defendant the trial court reccived evidence
in support of that plea.

HM The ground of the defendant’s appeal is the asserted
error of the trial court in admitting evidence in support
of the plea of res judicata and in concluding that such
evidence barred the right of the defendant to any relief on
his cross-complaint ; also that the court erred in refusing to
admit evidence of the community character of the property.

The defendant and Artee Allen McCrary in her lifetime
were husband and wife. In 1923 an interlocutory decree of
divorce from her husband was granted to the wife in an
action commenced by her. No appeal was taken from the
interlocutory decree entered in that action. A final decree
was never entered. The judgment-roll in said action was
received in evidence in support of the plaintiffs’ plea in bar.

In the complaint in the divorce action it was alleged that
there was no community property of the spouses. This al-
legation was denied by the answer, and in his cross-com-
plaint filed in that action the defendant alleged that the real
property here in controversy was the community property
of the spouses. From the interlocutory decree it appears
that formal findings of fact were waived, but in the decree
it is recited: ‘‘And it appearing to the court and it is hereby
found that there is no community property belonging to the
parties hereto ... Wherefore it is hereby ordered, ad-
judged and deereed that a divorce ought to be granted to
said plaintiff . .. and it is further ordered, adjudged and
decreed that the defendant take nothing by his cross-com-
plaint.’’

510 [|

The pleadings in the divorce action show that the prop-
erty rights of the spouses including specifically the property
involved herein: were in issue. In such a case the interlocu-
tory decree adjudicated the adverse claims with respect to that
property. It was therefore a final adjudication of the prop-
erty rights of the parties and becomes res judicata in any
subsequent action where, as here, the plea may appropriately
be interposed. (Klebora v. Klebora, 118 Cal. App. 613
[5 Pace. (2d) 965].) No error is shown.

The motion is granted and the judgment is affirmed.

Seawell, J., Langdon, J., Preston, J., Curtis, J., Thomp-
son, J., and Waste, C. J., concurred.

[Orim. No. 8724. In Bank.—April 9, 1934.]

THE PEOPLE, Respondent, v. WALTER LEWIS,
Appellant.

Byrl R. Salsman for Appellant.

U. 8. Webb, Attorney-General, and Seibert L. Sefton,
Deputy Attorney-General, for Respondent.

| | 511

PRESTON, J.—Appellant was convicted of murder in
the first degree and sentenced to suffer the death penalty.
He appeals from the judgment of conviction and order deny-
ing his motion for new trial.

The record is singularly free from error and the appeal
presents no ground for reversal of the judgment. [J Evi-
dence was offered by the prosecution to prove that the
murder was deliberate, premeditated and accomplished in
an attempt to perpetrate a rape, at a time when appellant
was sober and in possession of his faculties. Appellant
claims that he made no attempt to commit rape but struck
the fatal blow without the deliberation necessary to first
degree murder (sec. 189, Pen. Code), his act being ‘‘that
of a drunken man—unreasoning and without cause’. Ap-
pellant also, in effect, asks us to overrule, or hold here
inapplicable, the doctrine long established in this jurisdic-
tion, that to constitute murder of the first degree, there
need be no appreciable space of time between the intention
to kill and the act of killing. (People v. Donnelly, 190 Cal.
57 [210 Pac. 523]; 18 Cal. Jur. p. 598, sec. 15, and many
cases cited.)

This argument requires no discussion in view of the fact

. that there is in the record ample evidence to support the
verdict, either on the ground that the killing was wilful,
deliberate and premeditated, or that it was committed in
an attempt to perpetrate rape. There is also persuasive evi-
dence of appellant’s sobriety at the times in question. A
brief statement of fact will serve as a basis for this con-
clusion :

Appellant, a colored man, fifty-one years of age, and a
colored woman living with him and passing as his wife,
resided at Mayfield, Palo Alto, California, in a shack at the
rear of premises occupied by Mrs. Wright, also colored and
a sister of the deceased. The crime was committed on Feb-
ruary 4, 1933, in the evening. On that day appellant spent
the time from about 9 o’clock in the morning until between
4 and 5 in the afternoon, in making a trip by automobile
from Palo Alto to Oakland, and return, in the company
of a colored friend and his son. These parties performed
respective errands in and around Oakland and there pur-
chased a pint or more of whisky, which was partially con-

512 Le Ys

sumed by appellant and his friend prior to reaching home.
At one place where he called during the day appellant was
given a drink of whisky and of beer; in addition he took
three or four drinks from the bottle of whisky above men-
tioned. However, his companions testified that he was
sober at all times and their testimony was corroborated by
various witnesses who saw and talked with appellant after
he returned home. Indeed, the evidence in support of the
defense of intoxication is unsatisfactory and at most it only
raised a conflict which the jury was thoroughly warranted
in resolving adversely to appellant.

‘When appellant arrived home his ‘‘wife’? was not there.
He feared that she might have left him for good and
immediately went about the neighborhood making inquiry
as to her whereabouts. As a result his suspicion that she
had gone ripened into conviction. He returned to the shack,
where he lay down on the bed. The deceased was a colored
girl about thirty years of age, small of stature, partially
erippled, of good moral repute and unmarried. She had
known appellant casually since 1919, had seen him fre-
quently during the several months her sister let him live
in the shack, and they were friendly, ‘“‘just like home
people’? to each other. About 9 o’clock of the night in
question the deceased called at her sister’s to attend a party ©
but found that she was too early as her sister had not yet
come home. She then went to the shack in back, knocked
at the door and when appellant answered, started to con-
verse with him about his ‘‘wife’’. At his invitation she
entered the room to continue her visit with him. The mur-
der was committed soon thereafter.

Appellant contends that at said time he was so intoxi-
cated as not to be accountable for his acts. He further
claims that this is true although the effect which the day’s
drinking had upon him might not have been apparent to
those who observed.and talked with him. He testified that
the killing occurred in the following manner: ‘‘I just threw
a fit; I jumped up and struck her, that is all. I had no
cause, or I cannot give no account. ... Only being drunk,
that is all’? He further testified that he made no effort
to have sexual intercourse with the deceased; that he had
the ‘‘first thought’’ of striking her at the time he struck
her; that afterward he left the shack, walked up past the

— a 518

Mayfield depot and on up the railroad track some distance
and then lay down and stayed until it was light, whereupon
he continued to move on. This version of the crime differed
materially from that given by appellant on various occasions
subsequent to his apprehension and prior to trial, as will be
hereinafter shown.

About 9:30 P. M. the sister of the deceased arrived home
and soon became concerned over the latter’s nonappearance.
Later she reported the unaccountable absence of the de-
ceased to the police. About 10:30 she and the police
searched the premises. They tried the door of the shack,
found it locked, forced their way in and discovered the body
of the girl. She had been hit with a blunt instrument (an
axe wielded by appellant) on the head so severely as to
break the left side of her skull into fifteen different pieces
in the circular area near the bruise. The blow had evi-
dently caused immediate death. There was no indication of
a struggle. The body lay across the bed, with legs hanging
over the edge, the head sunk in the bedclothes and sur-
rounded by a pool of blood. The dress and underskirt of
the deceased had been thrown back over her so that the
lower portion of her body was exposed. Medical examina-
tion showed her organs to be in normal condition, without
physical evidence of any forced attack upon her. The
physician testified, however, that owing to her age, sexual
intercourse would not necessarily be revealed by an autopsy.
On the floor near by was found an axe, the head thereof
covered with fresh blood. Also on the floor, and under the
left foot of the deceased, was found a knife with a spot
of blood thereon but there was no proof that the deceased
had tried to use this kmife in self-defense.

Appellant was arrested in March at a hobo camp near
El Centro, California. During the days following his ap-
prehension he talked freely and voluntarily with the officers
about his commission of the crime and his mental state
prior thereto. He twice affixed his name to statements
purporting to give a full report of the occurrence. The
following is taken from the first of these statements: ‘‘I
came home from Oakland and I found my wife gone and
I went out to look for her and I came back home and I
came in contact with Hatha Holliday. She came out to the
house and sat down and talked. I told her that my wife

[|

5d a —

had quit me and she said she would be my girl. And she
said that she would come to see me twice or three times a
week. She told me how much she cared for me. There was
no argument nor fight nor nothing and I was just drunk
and Imocked her in the head with an axe. I remember
hitting her but I didn’t know she was dead. After I
struck her I just walked out and shut the door ... I kept
the axe setting in the closet. I just walked over and got it
and struck her with it. She was laying down on the bed
and I left her laying down on the bed. I was standing up
when J struck her... .

The following is taken from a later account given by
appellant to police officials and subseribed by him: ‘‘Ernes-
tine Halliday came out to see him in the shack; she asked
for his wife and said that she had been out there previously
when he was not there. He admitted trying to ‘‘make’’
(have intercourse with) her but she was not willing. He
stated that he was terribly worked up over his wife having
left him. His wife was not really his wife but a woman
who was living with him. All his life he had trouble with
women and he resented keenly anyone who would try to
take any of his women away from him, and he was crazy
because the woman he had been living with had left... . ’”

It is clear from the above recital, which sets forth but
part of the testimony in behalf of the prosecution, that the
record in this cause contains abundant evidence to support
the verdict and judgment.

The judgment is affirmed. The order denying motion for
new trial is affirmed.

Langdon, J., Thompson, J., Shenk, J., Seawell, J., and
Waste, C. J., concurred.

SS 5

[S. F, No. 14996, In Bank—April 11, 1934]

COMMERCIAL UNION ASSURANCE COMPANY, LTD.
(a Corporation), et al., Appellants, v. PACIFIC ‘GAS
AND ELECTRIC COMPANY (a Corporation) et al.,
Respondents.

Perey V. Long and Bert W. Levit for Appellants.

Thomas J. Straub, W. H. Spaulding and Clinton F.
Stanley for Respondents.

51S

WASTE, C. J.—This cause was taken over after decision
in the District Court of Appeal, First District, Division Two,
in order that we might more fully consider certain assign-
ments of alleged error on the part of the trial judge in his
conduct of the case. Upon an examination of the entire record,
including the evidence, we are satisfied with, and adopt as
and for the decision of this court, the following portions of
the opinion of the District Court of Appeal, prepared by
Mr. Presiding Justice Nourse:

“*Plaintifis are twenty-four fire insurance companies who
sued the defendant for loss by fire of a warehouse building
and goods stored therein upon which the plaintiffs had satis-
fied claims for-loss. The cause was tried by a jury, which
returned a verdict for the defendant. From the judgment
following the verdict the plaintiffs have appealed upon type-
written transcripts.

“On May 5, 1931, the warehouse and all its contents
were totally destroyed by a fire of unknown origin. Stored
therein at the time were 155 reels of copper wire owned
by the defendant. All the property destroyed other than
that owned by the defendant was insured by one or more of
the plaintiff companies. The basis of their action is that
for the purpose of saving its own property the defendant
broke into the warehouse at a time when the plaintiffs claim
that the fire was under control and confined to a small area,
and that such entry caused the fire to flare up and pass
beyond control. The defense is that when the employees of
the defendant entered the warehouse the fire, which had
been smouldering for approximately three hours, showed defi-
nite signs of being beyond control and that these employees
were then convinced that the fire was then incapable of be-
ing controlled and that the property of the defendant would
be destroyed unless removed from the warehouse.

“The warehouse was located at the town of Irvington in
Alameda county. The fire was discovered at the warehouse
at about 4. A.M. The town of Irvington had no fire depart-
ment and calls were made on the adjoining towns of Center-
ville, Niles, and Mission San Jose. These responded with
fire trucks and chemical tanks. The chief of the Centerville
department, who was in charge of the operations, located
the fire in a small area in the northeast portion of the ware-

SS

house where sacks of beet pulp were stored and in the
wooden frame of the skylight immediately above the beet
pulp. Firemen entered the building on the east side and
opened the skylight for the purpose of throwing water upon
the framework and upon the beet pulp underneath. The
flame in this portion of the building was put out, but the
fire continued to smoulder, filling the warehouse with smoke
for a period of approximately two hours thereafter and
until the entry of the defendant’s employeés as hereafter
stated. During the course of the operations the fire chief
discovered that the water supply was insufficient and
ordered the laying of a pipe line to tap an additional water
supply about a quarter of a mile away from the warehouse.
While he was in charge of this work the employees of the
defendant discovered that the fire had broken out under-
neath the floor of the warehouse and was running into the
northwest corner of the building, where defendant’s cable
was stored. They then asked permission of the owner of
the warehouse to enter and remove their property. Some
fifteen or thirty minutes after the fire was discovered burn-
ing underneath the floor defendant’s employees made entry
and then discovered it had moved from the beet pulp in
the northeasterly corner of the building to the northwest
corner, where their:cable was stored, so that they were un-
able to remove the cable through the door by which they
had entered. A portion of the wall of the warehouse was
therefore removed and four of the 155 reels were rolled
through this opening. Other reels had fallen through the
burning floor, causing sparks to fly about the workmen,
and this, together with the heat from the burning floor, pre-
vented them from making further recovery of defendant’s
property.

“There is no dispute as to the essential facts in-
volved. Some of the witnesses differed in their opinion
as to the question whether the fire was under control or
could be controlled by the facilities at hand, but upon the
main fact that the fire had extended from the beet pulp
and was destroying the floor of the warehouse before de-
fendants entered there is no substantial dispute. In
plaintiffs’ behalf their witnesses adopted the theory that
when defendant’s employees opened the door on the north-
west corner of the warehouse they caused a draft through

520 ee

the building which fanned to flame tne smouldering fire in
the beet pulp, thus causing. the total destruction of the
building. On defendant’s behalf witnesses testified that
the fire was completely out of control at the time they
entered the building; that it had proceeded along the floor
and underneath the building to such an extent that no
further effort could save the building and the destruction
of its contents. This opinion is based more or less upon
the admitted fact that at all times there was an opening on
the east wall of the building close to the place where the
beet pulp was stored, an open skylight directly above the
beet pulp, and an opening under the eaves three or four
inches high all around the building. It was also undis-
puted that smoke was pouring out of all these openings
from 4:00 a. m. until about 7:30 a. m., when defendant’s
employees entered the building.

“‘Disregarding the opinions and theories of the various
witnesses and confining the case strictly to the undisputed
evidence, the single question that was presented to the jury
was whether the defendant, in its efforts to protect its own
property, believed and had reasonable grounds for believing
that its property was in danger of destruction unless re-
moved and whether the acts.of defendant’s employees in this
connection were reasonable and proper’ under the circum-
stances. On the issue of law involved the bricfs are sin-
gularly vc.d in the citatien of authority and long in the
repetition of the testimony of witnesses. It should be un-
necessary to say that this court cannot review this testimony
for the purpose of passing on the credibility of the witnesses
heard by the jury. Our only interest is to determine
whether there is substantial evidence to support the verdict.
The appellants do not claim that there is not substantial
evidence for that purpose and in view of the record this
claim could not be made.

HI ‘‘0n the main issue the rule is stated in 45 Corpus
Juris, page 712, that ‘Where an emergency arises involving
danger to one’s property, he is justified in attempting to
save the same, and if he acts with reasonable prudence in
the endeavor to rescue or protect his property he is not
liable for resulting injury to property of another.’ Owen
y. Cook, 9 N. D. 184 [81 N. W. 285, 47 L. R. A. 646], is
cited in support of the statement. That was a case where

SS

the defendants started‘ a back firé to save their homes from
destruction by an approaching prairie fire. The plaintiff
claimed that the back fire spread beyond the main fire and
caused the destruction of his property. The supreme court
ot North Dakota held that the acts of the defendants were
not negligent but that they had the right to take such steps
for* the protection of their own property as were reason-
able and proper under the circumstances. Valentine v.
Minneapolis, St. P. & 8. 8. M. Ry. Co., 155 Mich. 151 [118
N. W. 970], is cited by the appellants. In that case cer-
tain forest products of the plaintiff and freight cars of the
defendant were on fire. The plaintiff owned other forest
products which it claimed were safe from fire. The de-
fendant moved one of its burning carsalong its track where
these products were located and they were'destroyed by
a fire coming from this burning car of the defendant. The
defendant did not justify’ its removal of the burning car
for the purpose of saving its own property, but relied upon
the defense that the property of the plaintiff would have
been destroyed in any event. The real point of the Valen-
tine case is that upon the issues so formed it was a simple
question for the jury to determine whether defendant’s act
in moving its burning car was reasonable and prudent and
whether the defendant had sustained the burden of proof
of its issue—that plaintifi’s property would have been
destroyed notwithstanding the acts of the deferJant com-
plained of. Latta v. New Orleans etc. Ry. Co., 131 La. 272 .
[59 So. 250, Ann. Cas. 1914A, 988], also cited by appellants,
is not helpful. There the court held that in determining
the liability of one who destroys the property of another to
save his own, consideration should be given to the relative
values and the comparative ability of the sufferers to bear
the loss. This is a doctrine to which we need not subscribe,
as the case is to be controlled by other issues.
‘Appellants complain of the following instruction:
. ‘If you find that defendant’s employees believed and’ had
reasonable grounds for believing that defendant’s copper
wire and reels were in danger of destruction if left in the
warehouse here in question, then I instruct you that de-
fendant’s employees. had the right to enter said warehouse
and use all reasonable means to remove said wire and reels
* therefrom, and if you find that defendant’s employees acted

522 ee

as ordinarily reasonable and careful men would act under
such circumstances in endeavoring to remove said wire and
reels from the warehouse, then I instruct you that the de-
fendant was not negligent.’ It is argued that the instruc-
tion is erroneous because it excused respondent if the entry
of the warehouse had been made after respondent’s em-
ployees believed and had reasonable grounds for believing
that respondent’s property was in danger of destruction
unless removed. It is also argued that there is error in
the instruction because it failed to note the provisions of
the Penal Code preventing obstruction of firemen in their
attempt to extinguish fires. We do not believe that the
instruction is susceptible to either attack. Hi We must
bear in mind that the action is one for negligence and not
one based upon acts of premeditation and formed intention.
The jury was instructed that negligence is the omission to
do something which. an ordinarily careful and prudent
person would have doae under the same or similar cireum-
stances, or doing something which such a person would not
have done in the same situation; that in determining
whether one exercises ordinary care the jury should consider
all the facts proved and all the surrounding circumstances
and say whether the conduct of the defendant was that of a
person of ordinary prudence and ‘discretion under such
circumstances, Having cast their case in negligence the
appellants committed to the jury the duty of detezmining
. whether under all the facts and surrounding circumstances
the conduct of defendant’s employees was that of persons
of ordinary prudence and discretion and this is all that
the instruction complained of advises the jury to do.
Manifestly, if respondent’s employees did not believe that
respondent’s property was in. danger of destruction they
had no right to enter the warehouse because to do so under
such cireumstar.ces would have been a trespass. The in-
struction does not nullify the provisions of Penal Code sec-
tion 385 as claimed by appellants. The giving of the chief’s
orders to keep the warehouse closed and the revocation
of those orders was a question which was sharply disputed
in the evidence. If the jury believed the testimony of
respondent’s witnesses on this point and then found that
in entering the warehouse respondent’s employees ‘acted as
ordinary reasonable and careful men would act under the

SS =:

circumstances’, the jury would have found that the respond-
ent was not negligent in that respect and that was all that
was covered by this instruction. If the appellants had
desired an instruction on the Penal Code section they should
have requested it.

| | “‘Oriticism, is made of the instruction reading: ‘In
order to find a verdict for plaintiffs you must find two
separate facts; first, that defendant, in its endeavors to
save its property was negligent and careless, and second
you must also find that if defendant had not so endeavored
to save its property then the building and its contents would
not have been destroyed but would have been saved.’ It is
argued that this instruction casts too great a burden upon
the appellants, that the jury should have been instructed
that it was necessary to find nothing more than that ‘the
building might have been saved’ if respondent’s employees
had not made the entry complained of. J) It is said
that such an instruction would have permitted the jury to
speculate and: thus to return a verdict for the appellants
if it believed that it was possible that the building might
have been saved but for respondent’s act. Howren vy, Chi-
cago, M. & St. P. Ry. Co., 236 Ill. 620 [86 N. B. 611, 127
Am. St. Rep. 309, 20 L. R. A. (N. S.) 1110], is cited to
the point. That was a case where a railroad train had been
left standing across a public highway, thereby preventing
‘the fire department from approaching a fire burning on
property on the other side of the track. Plaintiff was
allowed recovery against the railroad company on the theory
that the property might have been saved if the fire depart-
ment had not been delayed by the standing train. We had
occasion to consider a similar question in Hanlon D. & 8.
Co. v. Southern Pac. Co., 92 Cal. App. 230, 284 [268 Pac.
385], where other cases to the same point are cited. The
rule of these cases is that the wneaplained blockading of
‘the fire department and interference in its endeavors to
control the fire makes a prima facie case of negligence in
favor of the plaintiff whose property was destroyed by the
fire. It is not the rule that damages may be awarded upon
mere conjecture or surmise or that plaintiffs’ burden of
proving the actual damages sustained by the acts com-
‘plained of is in anywise lessened... .

52,

“Criticism is made of the rulings of the trial court
in excluding testimony of witnesses as to what the fire
chief told them relative to keeping the building closed.
The rulings were made excluding testimony which would
have been mere hearsay, but the appellants were not harmed
because all the evidence which they sought to produce
through these witnesses was properly tendered and received
at other stages of the trial. [JJ Appellants complain of
the ruling excluding the testimony of the fire chief as
to his opinion whether the fire was under control ‘during
the time that the pipe was being laid’, The answer was
properly excluded because the chief was shown to have been
absent from the place of the fire during a large part of the
time when this pipe was being laid. JJ Another member
of the fire department was asked if in his opinion the fire
was under control. The court sustained the objection as to
the form of the question stating that the witness could tell
what effect, if any, the opening of the wall by the respondent
had upon the extension of the fire. There was no error
in the ruling... . ”’

We find no error in the giving of the instruction
on contributory negligence. The issue was brought in to
the case by way of affirmative defense. In support of its
allegations thereon the defendants introduced evidence tend-
ing to show that the destroyed warehouse had been built
more than forty years, had been of wooden frame construc-
tion with a wooden floor, and that at the time of the fire
had contained many sacks of grain, feed; beet pulp, and
other readily inflammable products. Without passing upon
the weight or sufficiency of this evidence, we are satisfied
that its presence warranted the giving of the instruction
now assailed.

HH Appellants complain of a ruling limiting their
eross-examination of an expert witness. The hypothetical
question to which an objection was sustained not only failed
to state the facts as shown by the evidence, but assumed
facts contrary to the uncontradicted and established facts
of the case. The question was not propounded to test the
qualifications of the witness. Under the circumstances, and
in view of the discretion vested in a trial court in this par-
ticular, we find no impropriety in the ruling. (Roche v.
Baldwin, 148 Cal. 186, 192 [76 Pac. 956]; MacCoy v. Gage,

a Es 525

38 Cal. App. 672, 674 [177 Pac. 296].) Moreover, appel-
lants by their next succeeding, and properly framed, ques-
tion, achieved the desired result.

HI In conclusion, we are satisfied from an examina-
tion of the entire record that the trial court was not guilty
of prejudicial misconduct by reason of certain remarks
complained of by the appellants. A trial judge is not to
be unduly and unreasonably hampered and restricted in
the exercise of control over the proper examination of wit-
nesses and the conduct of the trial generally. Considerable
latitude is, and must be, accorded to him in this regard.
We fail to discover wherein the trial judge in the present
ease exceeded the bounds, to the prejudice of the appellants.

The judgment is affirmed.

Curtis, J., Shenk, J., Thompson, J., Tyler, J., pro tem.,
and Knight, J., pro tem., concurred.

[L. A. No, 14443, In Bank—April 13, 1934.]

NORMAN LA RUE PHILP, Respondent, v. ETHEL
LOUISE PHILP, Appellant.

Clarke & Bowker and Dixie Dunnigan for Appellant.

Golden & Kaufman for Respondent.

PRESTON, J. This appeal by defendant from judgment
for plaintiff, submitted on motion to dismiss appeal or affirm
judgment, presents the main question of sufficiency of the
evidence to support the conclusions of the court below.

On September 26, 1931, plaintiff and defendant, then hus-
band and wife, executed a property settlement agreement,
dividing equally their entire community estate and further
providing that in the event plaintiff should be assessed upon
an unsettled income tax claim, defendant would pay half of
the assessment. On March 21, 1932, the United States gov-
ernment levied an extra assessment of $14,802.42, which
plaintiff paid. Defendant refused to reimburse him as
agreed and he therefore brought this action to recover from
her half of said tax or the sum of $7,401.21. Defendant
answered and also cross-complained, secking impeachment
of the property settlement for fraud. To the cross-action
plaintiff pleaded a general denial and res judicata by rea--
son of a divorce decree; later he added pleas of estoppel
and laches.

The cause went to trial. Defendant endeavored to show
that plaintiff, by deceit and fraudulent representations, had
induced her to execute the property settlement at a time
when she was in a worried, weakened mental and physical
condition; that he took undue advantage of her trust and
Jove for him, engendered by their marriage of more than
twenty-two years; that she acted without independent advice,
relying solely upon plaintiff’s false assurances that they
would be permanently reconciled.

It appears that about August 13, 1931, some few weeks
prior to execution of said agreement, defendant filed against
plaintiff an action for divorce, based on charges of adultery,
wherein she sought an award of all their community prop-

fe Pe 527

erty. Plaintiff thereupon gathered together certain of the
community assets and secreted himself. He was finally lo-
cated on September 5, 1931, and served with summons. He
immediately returned home, arriving about 1 o’clock in the
morning, and forthwith effected with defendant what pur-
ported to be a sincere reconciliation, made in good faith with
intent of full performance, it being also understood that
defendant would dismiss her divorce action and that the
parties would execute an agreement settling their property
rights. However, plaintiff thereafter continued to live with
defendant for only about two months. In November, 1931,
he left for Reno, Nevada, to join one Mary Gilbert, defend-
ant’s sister-in-law, who was there securing a divorce and
whom he later married. During the brief period of resump-
tion by plaintiff and defendant of their marital relations,
the property agreement here in question was executed and
the divorce action was dismissed. To accomplish the latter
result, it was necessary for defendant to secure new counsel
as her then attorneys refused to dismiss the case.
Defendant claimed that so far as plaintiff was concerned,
the reconciliation was but a pretense or gesture made for
the sole purpose of securing her confidence and inducing her
to give him a favorable property settlement and to dismiss
her divorce complaint, thus relinquishing all chance of secur-
ing more than half of the community estate, together with
the right to share in future community earnings and to claim
support, maintenance and counsel fees. There was evidence
that while plaintiff was evading service of summons in the
divoree action he stated that he would return home, ‘“‘soft
soap’? the defendant, get a property settlement out of her
and then leave. Defendant claims that he did in fact suc-
ceed in doing just this and that her continuing love for him
made her a willing victim for she believed that he would
return to her as a dutiful husband; thus even over the
protest of her attorneys, she hired new counsel to secure a
dismissal of the divorce action and to draw up the property
contract—a contract which was manifestly unfair to her, as
it failed to account for substantial sums which had been
paid out by plaintiff from the community assets. Further
defendant asserted that her new attorney made no inde-
pendent investigation, but merely followed her directions;

528 Le |

therefore she really acted without indepehdent advice, in
sole reliance upon the misrepresentations of plaintiff.

Plaintiff thereafter filed a Mexican divorce proceeding
against defendant; she opposed the action and on November
30, 1931, commenced another divorce action against plain-
tiff, resting on allegations of cruelty. Plaintiff did not con-
test the case and on December 24, 1931, the court rendered
therein its interlocutory decree in favor of defendant, which
later became final, granting her a divorce and awarding to
her the sum of $3,233.35, stated to be one-half of the com-
munity assets of the parties, which consisted of two accounts
aggregating $6,466.71. In explanation of her failure to
question the validity of the property settlement in said
divorce proceeding, defendant stated that it was not until
she heard of plaintiff’s marriage in May, 1932, to said Mary
Gilbert, that she finally became convinced that he would
never return to her and that during the intervening period
she had been worried, harassed and mentally, if not physi-
eally, ill.

Plaintiff, as above stated, in answering the cross-complaint,
raised defenses of res judicata by reason of said divorce
decree, estoppel and laches. Furthermore, resisting the
charges of fraud on the merits, he offered evidence to show
that he acted sincerely and in good faith in undertaking the
reconciliation, in procuring the property agreement and in
approving the dismissal of the first divorce proceeding. He
testified that he resumed marital relations with defendant
in good faith, but that after a few weeks, and about Decem-
ber 31, 1931, he was again forced to leave home by reason
of her misconduct; that he had told her that if she wanted
a property settlement, they could have it and that he would
live at home for the sake of their boys if she would ‘‘leave
Bromo Seltzer alone and stop nagging’’, but that she thought
he was a liar and a thief and stole money from her and
that she tried to poison herself and give herself gas; that the
situation became so unbearable that he finally left her. Hvi-
dence was also received, which need not be detailed here, to
show that the property settlement was equitable, just and
fair to both parties, dividing equally their community estate,
and that defendant was mentally capable and competent
to contract throughout the period in question; that she
was independently advised and through her several attorneys

» 529

knew and was at all times fully aware of her rights and of
the consequences of dismissal of the first divorce action.

The court below, after hearing the cause, made findings
and gave judgment for plaintiff. Defendant appealed, urg-
ing the insufficiency of the evidence to uphold the findings
that the property settlement was just and fair and not in-
duced by fraud, actual or constructive, on the part of plain-
tiff. ‘She also contends that the said interlocutory decree of
divorce, disposing of a small portion of the community assets,
did not bar her attack upon the property settlement in this
action and that the finding of laches was not justified. The
last two questions need not be here discussed as they become
immaterial in view of our conclusion that the court below
was warranted, under the evidence, in refusing to set aside
the property agreement.

We have examined the record with care and find,
in the conflicting evidence, sufficient support for the findings
upholding the validity of the property settlement agreement.
In other words, it appears that said agreement made a full
and fair division of the community estate and that defend-
ant at all times had full knowledge of her rights in the
premises. It was the privilege of the court below to credit
the testimony and evidence of plaintiff that he entered upon
the reconciliation with sincere motives and acted in good faith
in his dealings with defendant and left her only because of
the insufferable situation created by the continual differ-
ences arising between them.

The judgment is affirmed.

Curtis, J., Shenk, J., Thompson, J, and Waste, 0. J.,
concurred,

[L. A. No. 18897, In Bank.—April 16, 1984.]

H. A. ROSENKRANZ, Respondent, v. H. L. BENTLEY
et al., Appellants.

530

Oliver M. Hickey, Wm. J. Clark and Henry M. Lee for
Appellants.

Phillips & Thompson and L. H. Phillips for Respondent.

PRESTON, J.—In this, a judgment-roll appeal by defend-
ants in an action to foreclose a chattel mortgage, they seek
to show a lack of jurisdiction in the Superior Court of Los
Angeles to enter the decree of foreclosure because at the
time the decree was rendered in the action, the sum due was
one over which the municipal court alone had jurisdiction.
This claim seems to be entirely without merit. The facts
necessary to confirm this conclusion are:

Plaintiff held a promissory note of defendants dated Sep-
tember 12, 1929, for the principal sum of $1750, due one
year after date, and secured by a second deed of trust on
real property. On April 24, 1981, defendants were in de-
fault in the payments required by this note, there being due
at that time the sum of $2,125. On said date proceedings
to conduct a sale in foreclosure were in progress but not
completed. Likewise, on said date, defendants became fur-
ther indebted to plaintiff in the sum of $900, also evidenced
by a promissory note, and they executed to plaintiff a chat-
tel mortgage on certain household effects to secure both
notes. The chattel mortgage contained the following provi-
sion:

es 63

with the further understanding however, that upon
any default of the terms or conditions of the note herein
mentioned and/or upon the failure of the mortgagors to pay
any or all taxes and assessments upon said real property
mentioned in said deed of trust given as security for the re-
payment of said loan of $1,750... and/or of any sums
due as principal and/or interest upon the first mortgage or
trust deed ... and/or upon the failure of mortgagors to
fulfill each and all of the terms and conditions of this chat-
tel mortgage and of the terms of the note in the sum of
$900. herein mentioned, being one of the items for which
this chattel mortgage is given as security, then, in that
event, mortgagee shall have the right to proceed with the
foreclosure of this chattel mortgage in accordance with the
terms thereof, and shall have the further right to resume
the proceedings already instituted ... for the sale of said
real property in accordance with said deed of trust...”

Defendants being in default on all their obligations, plain-
tiff instituted this action to foreclose said chattel mortgage.
The amount due on the first note was $538.15 and on the
second note (secured by the second trust deed) $2,286.45.
After commencement of the action and before judgment of
foreclosure, plaintiff resumed proceedings for sale under the
deed of trust; the foreclosure sale was held and the proceeds
thereof were sufficient to discharge the larger note. There-
upon the court, in this action, proceeded with foreclosure
of the chattel mortgage in liquidation of the smaller note
only.

It is conceded that if jurisdiction attached at the time
of the institution of the action, it remained throughout, even
though the amount of the debt at the time of judgment was
below the limit required for the jurisdiction of the superior
court. (Gardiner v. Royer, 167 Cal. 238 [139 Pae.. 75].)
The contention of appellants is that the chattel mortgage, as
to the larger note, was a second, and not a primary, obliga-
tion; therefore plaintiff could not foreclose except as to a
deficiency which might arise from a sale first had under the
deed of trust; hence, the superior court never had jurisdic-
tion. The unsoundness of this contention is evident. The
provision of the chattel mortgage above quoted seems clearly
to provide for a primary action of foreclosure as to both
notes, on default as to either or as to certain other covenants,

LL

all with the option in respondent to resume foreclosure pro-
ecedings under the deed of trust. This also appears from
the plain language of the following further provisions of
said chattel mortgage:

“The mortgagors mortgage to the mortgagee all that cer-
tain personal property . .. (describing it) as security for
the payment to H. A. Rosenkranz of the following obliga-
tions: 1. The sum of $900 with interest ... according to
the terms and conditions of a certain promissory note of
even date herewith ... (setting forth the note in haec
verba). 2. The sum of $2,125 approximately which is rep-
resented by a promissory note... (setting forth the note
in haec verba)....”? .

The doctrine of the recent case of Bank of Italy, etc., v.
Bentley, 217 Cal. 644 [20 Pac. (2d) 940], does not scem to
be in any way involved. Plaintiff here has a double primary
security and has the right to procecd to realize upon the
one, the other, or both, at his election.

The judgment is affirmed.

Curtis, J., Thompson, J., Shenk, J., Langdon, J., and
Waste, C. J., concurred,

[L. A. No, 18715, In Bank.—April 16, 1934.]

CLAUDE H. BROWN et al. Appellants, v. GUARANTY
MORTGAGE COMPANY OF CALIFORNIA et al.,
Respondents,

[L. A. No, 18716, In Bank.—April 16, 1984.]
FIDELITY SAVINGS AND LOAN ASSOCIATION (a

Corporation), Respondent, v. CLAUDE H. BROWN
et al., Appellants.

Ss :
Ce)

Newby & Newby and Dee Holder for Appellants.

Arthur F. Coe, John L. Mace, Woodruff, Burr & Smith,
and Woodruff, Musick & Hartke, for Respondents.

SHENK, J.—The appeals by the appellants Brown are
from judgments in the consolidated cases above entitled
and are presented on one record.

The appellants Brown in 1923 applied to Guaranty Mort-
gage Company of California for and received a loan, the
proceeds of which were used in completing the construction
of a certain building. Two notes were given to evidence
the loan, one for $90,000 and the other for $95,000, each
payable to the Guaranty Mortgage Company and bearing
interest at seven per cent per annum. The notes were nego-
tiable in form. To secure payment of the note for $90,000
the makers executed a first mortgage on said property and
to secure the $95,000 note a deed of trust on the same prop-
erty was executed. The Fidelity Savings and Loan Associ-
ation became the owner and holder of the $90,000 note
before its maturity. Certain payments on account of the
interest on that note were made by the makers, but nothing
was paid on the principal. The Fidelity Savings and Loan
Association brought an action to foreclose the mortgage.
The Browns, the makers of the notes, commenced an action
against the lender, Guaranty Mortgage Company of Califor-
nia, the Fidelity Savings and Loan Association, and others
to have it declared that said loan transaction was usurious,
for an injunction preventing the defendants from proceed-
ing with foreclosure proceedings, and for other relief. The
basis for the charge of usury was the claim that the defend-
ant Guaranty Mortgage Company dedueted and retained
from the proceeds of said $90,000 note the sum of $36,867
as a bonus for making said loan of $185,000. Upon issue
joined the cases were consolidated and tried together. The
trial court found that the transaction between the plaintitis

oT

Brown and the Guaranty Mortgage Company was usurious.
It also found that the Fidelity Savings and Loan Associa-
tion and certain other defendants were purchasers of said
notes for value before maturity and without notice or knowl-
edge of the usurious character of the transaction between the
makers and the lender. The court rendered judgment for
the plaintiff Fidelity Savings and Loan Association in the
foreclosure action. It denied to the plaintiffs Brown in their
action for an injunction any relief as against the Fidelity
Savings and Loan Association or the other defendants who
were found to have been bona fide purchasers from the
Guaranty Mortgage Company. The Browns have prosecuted
appeals from both judgments.

No contention is made that the evidence does not
support the finding that the purchasers gave value and had
no notice or knowledge of the usurious nature of the trans-
action. The only contention of the appellants is that under
the provisions of the Usury Law an agreement to pay inter-
est in violation of the act is void and that this invalidity
continues throughout the existence of the agreement into
whosoever hands it might come. The appellants rely on
cases such as Sabine v. Paine, 223 N. Y. 401 [119 N. E. 849,
5 A. L R. 1444), which have been distinguished in the case of
Baker v. Butcher, 106 Cal. App. 358, 366, 367 [289 Pac.
236], wherein a similar question was involved and a judg-
ment similar to the one in the case at bar was affirmed.
The appellants question the authority of that case inasmuch
as the court there relied upon the case’ of Community Laum-
ber Co. v. Chute, (Cal. App.) 284 Pac. 466, in which a peti-
tion for rehearing was granted and the case as finally decided
(Community Lumber Co. v. Chute, 215 Cal. 268 [10 Pac. (2d)
57]), did not determine the immediate question involved.
More recently, however, the case of Connon v. Goebel, 217
Cal. 399 [18 Pac. (2d) 931], of necessity recognized the force
of the distinction made in the case of Baker v. Butcher, supra.
The Connon case hag settled the question in this state at
least to the extent that a negotiable promissory note, which
does not show its usurious nature on its face, is enforceable
in the hands of a bona fide holder who became such before
maturity, even though the contract was usurious in its in-
ception,

CE

The effect of the decisions in this state renders it un-
necessary to discuss or decide the question whether the
makers’ ‘‘waiver of offset statement’’ involved herein could
have the effect of creating as against them an estoppel to

claim the note or any part thereof void.
The judgments are affirmed.

_ Thompson, J., Curtis, J., Langdon, J., Preston, J., and
Waste, C. J., concurred.

Rehearing denied.

\

{L. A, No, 14510, In Bank—April 19, 1984.]

ETTA RITTERSBACHER, Appellant, v. BOARD OF
SUPERVISORS OF LOS ANGELES COUNTY et al.
Respondents.

538

Daniel E. Farr and W. Torrence Stockman for Appellant.

Everett W. Mattoon, County Counsel, and Gordon Boller,
Deputy County Counsel, for Respondents.

SHENK, J.—The plaintiff above named is the owner of
unimproved lot No. 22 in block 15, tract No. 8235, in Los
Angeles County. By her petition filed in the superior court
she sought a writ of mandate to compel the defendants,
poard of supervisors, county auditor, county tax collector
and county counsel to order and consent to the cancellation
of the assessment for general county purposes levied against
said lot by the county assessor for the year 1933. On July
17, 1933, through her agent, she filed with the board of
supervisors, sitting as a board of equalization, her petition
to have the valuation placed upon said property by the
assessor reduced from $640 to $385. After a hearing her
petition was denied on July 26, 1933. On September 19,
1983, she commenced this proceeding in the superior court to
obtain the cancellation of said assessment ‘‘or such portion
thereof as the court finds to be erroneous”’.

Through the same agent eight other owners of real prop-
erty, some of which was improved and some unimproved,
filed separate petitions with said board of equalization to
have the assessments on their several properties reduced to
designated sums. These petitions were denied and the peti-
tioners therein filed similar petitions in mandamus to com-
pel the cancellation of said assessments, ‘‘or such portions
thereof as the court finds to be erroneous’’. To each petition
for the writ a general demurrer was filed. Pursuant to a
stipulation of the parties and an order of court all nine

SS °°

causes were consolidated and thereafter treated as one pro-
ceeding. The demurrers were sustained without leave to
amend and a judgment of dismissal entered, whereupon an
appeal was taken both from the order sustaining the de-
murrers and from the judgment of dismissal. The appeal
from the order, which is nonappealable, is dismissed.

On the appeal from the judgment it is contended
that the petition for the writ of mandamus, together with
the exhibits attached thereto, shows that the uncontradicted
evidence before the board of equalization, at the time the
petitions for equalization were denied, proved that the asses-
sor had wilfully adopted and deliberately pursued an errone-
ous and discriminatory and inequitable method of assessing
different classes of property which resulted in excessively
inequitable valuations of the property of the plaintiffs, and
therefore that the peremptory writ should have been granted.
In this connection it is claimed that the uncontradicted evi-
dence before the board at the time the petitions for equali-
zation were denied was that the assessor adopted a lower
percentage in assessing certain classes of personal property
than that applied to real estate and improvements, to the
unlawful prejudice of and discrimination against the latter.
That evidence, as produced by the agent of the several peti-
tioners, was to the effect that, in passing the property in
the county ‘‘in proportion to its value to be ascertained as
provided by law’’, as required by the Constitution (art.
XIII, see, 1), and by sections 3617 and 3627 of the Political
Code, the assessor adopted fifty per cent of the value of
real property and fifty per cent of the depreciated value of
improvements thereon as the value of said property for the
purpose of assessment; that in assessing merchandise the
assessor adopted forty per cent of the ‘‘cost or market value,
whichever is lower’’; that forty per cent was applied to
stocks of new automobiles, thirty per cent to fleets of auto-
mobiles in use, thirty per cent to store fixtures, forty per
cent to office furniture and fixtures, thirty per cent to ma-
chinery and equipment and thirty per cent to used automo-
biles. After this evidence was produced by the petitioners
the assessor requested and was accorded the right to reply at
a later date. This reply was filed with the board, but not
until after the board had denied the petitions. Therefore
the plaintiffs herein contend that the defendants are bound,

0s

on the subsequent proceeding for a cancellation of the assess-
ments pursuant to section 3804a of the Political Code, by the
showing of the alleged uncontradicted facts made to the
board at the time of or prior to the orders of denial of the
petitions to equalize. But this is not so. The petitions filed
with the board alleged an overvaluation of the described real
estate and improvements and nothing more, and the prayer
was for an equalization of the value. “To equalize is to
make equal, to cause to correspond, or be like in amount or
degree, as compared with something.’”’ (Wells Fargo & Co.
vy. State Board of Equalization, 56 Cal. 194, 196.) What the
petitioners before the board were entitled to was that their
property be placed ‘‘on the same basis of valustion as that
applied to other property of like character and similarly
situated”’. (Birch v. County of Orange, 186 Cal. 736 [200
Pac. 647, 649]; Los Angeles etc. Co. v. County of Los An-
geles, 162 Cal. 164, 166 [121 Pac. 384, 9 A. L. R. 1277].)
On the hearing on this issue the assessor’s office reported to
the board, in effect, that there was no disparity between the
assessment on the properties of the petitioners and that
placed on like property similarly situated, and there was no
showing to the contrary on that issue.

As above indicated, the petitions for equalization filed
with the board made no reference whatever to the claim of
the petitioners that their properties were assessed on an un-
lawfully discriminatory basis. The petitioners failed then to
advise the board of ‘‘the facts upon which it is claimed such
reduction should be made’’, as required by section 3674 of
the Political Code. While mere informalities in the presen-
tation of a petition for equalization should receive a liberal
indulgence, nevertheless the above requirement of said sec-
tion 3674 serves a necessary purpose and should be complied
with in order that the board may know, or have some rea-
sonable means of ascertaining, what the claims of the peti-
tioners are, to the end that such claims may be investigated
by the assessing authorities prior to the hearing. The proof
offered by the petitioners at the hearing might well have
taken the assessor by surprise as being entirely without the
scope of the inquiry presented by the petitions, and this may
account for the fact that the assessor requested time to make
a veply to the attempted showing of illegality of the assess-
ments. [J In this connection it must be noted that the

SS 5:

claims of the petitioners on the hearing, if supported to their
full import, would invalidate the entire assessment-roll of
the county, or would require the board to raise or lower the
entire assessment-roll, a power not possessed by the board
under section 3673 of the Political Code. We therefore
conclude that the petitions for equalization as filed with the
board were properly denied.

We have discussed the foregoing points because they are
elaborately argued in the briefs; but a determination thereof
is not determinative of this appeal. [J The real question
is whether the petitions in mandamus state facts entitling
the plaintiffs to any relief; and this question must be deter-
mined on the facts existing at the time the petitions for the
writs were filed as disclosed by the allegations thereof. [|
It may be assumed that the denial of the petitions for equali-
zation would not foreclose the petitioners from later pre-
senting and pursuing their remand for a cancellation of the
assessments pursuant to section 3804a of the Political Code.
That section would seem to be available in the absence of any
previous petition to the board of equalization. Its obvious
purpose is to afford relief to a taxpayer whose property is
assessed ‘‘more than once, or erroneously or illegally’? as-
sessed. This section was applied and given effect in Central
Mfg. Dist. v. State Board of Equalization, 214 Cal. 288 [5
Pae. (2d) 424], wherein it appeared that to refuse the relief
prayed for would result in an assessment of the property
“‘more than once’? and result in double taxation. But that
is not this case. Here the plaintiffs concede that their prop-
erties are subject to assessment and taxation, and no question
of double taxation is involved. If their prayer for the can-
cellation of each asscssment in its entirety be granted, their
properties will escape taxation for the year in question.
Also, to grant the relief in so far as the cancellation of
“such portion as the court finds to be erroneous, illegal and
void’’, is sought, would presuppose that under said section
3804a the defendants herein could order and consent to the
segregation of the alleged illegal portion from that which the
plaintiffs properly should pay. The assessments in each case
are in a lump sum and said section 3804a contains no pro-
vision for segregation in the manner proposed.

When the question of the cancellation of the entire amount
as illegal is considered, we turn to the allegations of the

eS

petitions and the exhibits attached thereto. The petitions
allege the percentages adopted by the assessor as to real
estate and improvements, and the different percentages
adopted in the assessment of the certain classes of personal
property above noted and as shown before the board of
equalization, and the consequent alleged unlawful discrimina-
tion and illegality of the assessments. [J Attached to the
petitions and made a part thereof is a copy of the statement
and report of the assessor made to the board of equalization
in connection with the petitions to equalize. This report
may properly be considered as a part of the case made by
the petitioners herein. It would seem to make no difference
whether the matter in justification of the action of the de-
fendants appears as a part of the petition itself or as a part
of the return to the alternative writ, as occurred in Bank of
Italy v. Johnson, 200 Cal. 1, 28 [251 Pac. 784]. In either
event the showing made at the time of the return to the
alternative writ would govern notwithstanding an adequate
showing of justification for the acts of the defendants be not
earlier made. Such justification may appear from the facts
presented by the petitions, and the demurrer is a sufficient
return.

HM I¢ the plaintiffs were to prevail in this consolidated
proceeding the result would be to invalidate practically the
entire assessment-roll of Los Angeles County for the year
1933. Such a result may not lightly be contemplated and
should not be adjudged except upon a clear showing of
‘‘fraud or something equivalent of fraud’’ on the part of the
assessing authorities such as appearing in Mahoney v. City
of San Diego, 198 Cal. 388 [245 Pac. 189], and Southern
Pac. Land Co. v. San Diego County, 183 Cal. 548 [191 Pac.
981]. J No actual fraud or improper motives on the
part of the assessing authorities is charged or intimated.
Tf the plaintifis are to sueceed they must make a showing
of action on the part of the assessor such as would con-
stitute an arbitrary and wilful disregard of the law intended
for his guidance and be a constructive fraud upon them.
(Los Angeles etc. Co. v. County of Los Angeles, 162 Cal.
164 [121 Pac. 384, 9 A. L. R. 1277]; Birch v. County of
Orange, 186 Cal. 736 [200 Pac. 647]; Hammond L. Co. v.
County of Los Angeles, 104 Cal. App. 235 [285 Pac. 896].)
The allegations of the petition are not in themselves suffi.

SS 5:

cient if there is attached to and made a part of the petitions
documentary evidence which would counteract and destroy
the effect of the allegations.

HI This brings us to a consideration of the lengthy
written report of the assessor made to the board of equaliza-
tion and made a part of the petition. This report shows
that there are in Los Angeles County the following: In
excess of 1,217,000 parcels of real estate, comprising every
type of this class of property on which a valuation must be
placed; in excess of 1,150,000 structures of every conceivable
nature subject to assessment; in excess of 80,000 dealers in
all kinds of tangible personal property upon which valua-
tions must be placed; about 800,000 motor vehicles subject
to assessment; and in excess of 1,000,000 taxpayers owning
all the types, kinds and classes of other personal property
which it is necessary to appraise. All of this property must
be appraised and assessed within the limited time between
the first Monday in March and the first Monday in July of
the same year. To accomplish his task the assessor has about
600 field deputies to assist him. Obviously the enormous
extent of the task can afford no justification for an illegal
tax. These figures were presented by the assessor merely to
demonstrate that it is necessary that he promulgate certain
general rules and formulas of percentages of depreciation
for general use in order to secure uniformity in valuation as
required by law.

In his statement the assessor sets forth the standards set
up, the methods applied and the procedure followed by him
in arriving at the value of real property and improvements
thereon within his jurisdiction.: The methods adopted and
rules applied in assessing this class of property are not
seriously questioned. In arriving at the value of all prop-
erty for the purposes of assessment the assessor is guided
generally by section 3617 of the Political Code which defines
the term ‘‘value’”’ as ‘‘the amount at which the property
would be taken in payment of a just debt from a solvent
debtor’’. This value is expressed in section 3627 of the
Political Code as the ‘‘full cash value’? for purposes of
assessment. [JJ It is the assessor’s recognized duty to
see that the valuation placed on the various kinds of prop-
erty shall be in proportion to the worth of such prop-
erties. If it is proportional and all are treated alike, no

<r

one contends that the taxpayers must be charged a full
hundred per cent, for such is not required by the law.
It is also recognized that the assessment on personal prop-
erty shall be on a basis which is fair to the owners of real
property so that neither shall suffer to the advantage of the
other.

HHI In dealing with the assessment of personal prop-
erty the assessor is confronted with a difficult problem.
In an endeavor to solve it he recognizes. two general classes,
viz.: ““Business personal property’? and ‘‘personal prop-
erty’’. The former refers to that class of personal prop-
erty owned and used in manufacture, commerce and trade
and the latter to that class of personal property which
represents the personal belongings of individuals, usually
in their homes. With reference to a stock in trade it is
obviously impracticable if not impossible to take an inven-
tory and evaluate each article. The inventories of stocks
of merchandise reflected on the books of the company are
taken as indicative of their worth. This inventory is dis-
counted twenty per cent and then fifty per cent is applied
for assessment purposes. It is not pointed out by the
plaintiffs, nor does it appear how or in what manner the
discount so applicd is as a matter of law unreasonable or
unlawful. Coneeding that twenty per cent is an arbitrary
figure, some discount would appear to be necessary and
proper. Depreciation in value of merchandise which has
remained upon the shelves must take place, as surely as
depreciation of structures. Formerly the same percentage
of depreciation was applied to machinery and equipment.
But in recent years the replacement cost, which is deemed
an important factor, has been found to decline steadily, the
percentage of depreciation has been imereased accordingly,
and the fifty per cent of the value less this depreciation
has been applied for assessment purposes. A dealer’s in-
ventory of new automobiles has been discounted twenty per
cent and the remainder assessed on a basis of fifty per
cent. Used automobiles, both in the hands of dealers and
in use, are depreciated forty per cent on a basis of the
cost price and the year of manufacture. This is likewise
more or less arbitrary, but it must necessarily be so in
order to attain a proper degree of uniformity. Office furni-
ture and fixtures are depreciated forty per cent and the
depreciated value assessed on a basis of fifty per cent.

Ce __E

The schedule of depreciation applied to the various kinds
of personal property appears in the instructions given to the
deputy assessors and the depreciated value in all cases is
assessed on a basis of fifty per cent. The plaintiffs appar-
ently endeavored to show before the board of equalization
and now insist that the various kinds of personal property
were assessed on a different basis. The allegations of their
complaints are subject to that construction, but when the ex-
hibits are taken into consideration it becomes apparent that
the basis of their complaint rests upon the different per-
centages of depreciation applied to the various classes of
personal property. If the percentages of deduction for de-
preciation are not out of line there can be no room for the
claim that the valuations thus fixed are not assessed on the
same uniform basis as applied to real estate and improve-
ments. In the determination of the depreciation to be al-
lowed the assessor is vested with a large measure of discre-
tion, The percentages here shown to have been applied may
or may not have been too liberal in favor of the taxpayer,
but in order that the entire assessment-roll be adjudged in-
valid it must be declared that the depreciated value applied
by the assessor was not as matter of law ‘‘an amount at
which the property would be taken in payment of a just debt
from a solvent debtor’’, as provided in section 3627 of the
Political Code, and further that the rules prescribed and
methods pursued by the assessor were so unlawful, discrimi-
natory and inequitable as to constitute a constructive fraud
on the owners of real estate. We are not justified in so de-
claring, and conclude that the demurrers were properly
sustained, The judgment in the consolidated action is ac-
cordingly affirmed.

Thompson, J., Curtis, J., Langdon, J., Preston, J., and
Waste, C. J., concurred,

Rehearing denied,
{|

546 [|

[L. A. No, 14329. In Bank—April 20, 1984.]

D. WEBSTER EGAN, Respondent, v, IRENE ©. McORAY,
Appellant.

Henry G. Bodkin, Bodkin & Lucas, G. Stuart Silliman
and Bourke Jones for Appellant.

Frank Lober and D. Webster Egan for Respondent.

THOMPSON, J.—A rehearing was granted herein be-
cause we entertained a doubt concerning whether the order
hereinafter mentioned dismissing the action was in fact
void. For reasons hereinafter stated we have concluded that
it is unnecessary to determine that question.

This action, instituted August 2, 1929, was at issue and
on for trial on April 29, 1930. It involves a money demand
for $1346.08. [J At the time the case was called for trial
the court, acting under the mistaken belief that it had
been bereft of jurisdiction thereof by the provisions of the
statute of 1929 (Stats. 1929, chap. 477, p. 887, in effect
August 14, 1929), gave an order, which was entered in the
minutes only, purporting to dismiss the action. Later, and
on October 16, 1930, on motion of the plaintiff after due
notice, the court vacated said order of dismissal and restored

Eee oat

the cause to the calendar. From this last-mentioned order
defendant has appealed, asserting that the order of dismis-
sal became final and remained in full force and effect and
the trial court was without power to interfere with it.

In response to appellant’s contention the respondent says,
among other things, that the order of dismissal had not
become effective and final for the reason that no judgment
had been entered. We think the respondent’s position is
well taken. The general rule expressed in section 664 of the
Code of Civil Procedure is that no judgment shall become
“effectual for any purpose until so entered’’. When provi-
sion is made, as it is, with respect to certain grounds for the
dismissal of an action of which this is not one, in section
581 of the Code of Civil Procedure, it constitutes an excep-
tion to the general rule and cannot be extended beyond the
strict letter of the statute. This thought is confirmed when
we bear in mind that a motion to dismiss on the ground
of want of jurisdiction of the subject matter is in its
legal effect a demurrer to the complaint on that ground.
(9 Cal. Jur. 523.) Hence, to dispose of the action a judg-
ment is necessary. We are not without precedent to sup-
port this conclusion. In McCallum v. Still, 59 Cal. App.
572 [211 Pac. 466], the District Court of Appeal was
confronted with a somewhat similar situation. True, in that
case the court says that the order of dismissal ‘‘was un-
doubtedly inadvertently made’’, yet the fact remains that
the question was settled upon the ground that no judgment
had been entered. It was there said: ‘‘As recited above,
the purported dismissal was ordered by the court, but the
dismissal did not fall within the provisions of subdivision 3,
subdivision 4 or subdivision 5 of section 581 of the Code of
Civil Procedure. Such being the case, the rule governing
the procedure is that provided in section 582 of the Code
of Civil Procedure. If the clerk had proceeded to enter a
judgment of dismissal pursuant to the order made May 11,
1916, the appellant’s contention might have some merit.
However, as we have shown above, no judgment of dismissal
was entered and the court had full power on the nineteenth
day of February, 1919, to prepare and sign findings and
judgment disposing of the case on its merits.’’? Again we
find persuasive language in the case of Consolidated Const.
Co. v. Pacific Elec. Ry. Co., 184 Cal. 244 [193 Pac. 238],

5

wherein we read: ‘‘In fact strong reasons may: be urged
why the effective character which an order of dismissal
under section 581 assumes, upon its mere entry in the
minutes, is an exception to the general rule that judgments
must be entered in the judgment book before they become
effective as judgments (Code Civ. Proe., secs. 664 and 668),
and that the exception should not be extended beyond the
particular case provided for by the statute.’’

The conclusion to which we have come renders discussion
of other points unnecessary.

The order is affirmed.

Shenk, J., Langdon, J., Curtis, J., Seawell, J., and
Waste, C. J., concurred. .

PRESTON, J., Concurring—I concur in the result an-
nounced, but I think the reasoning employed may lead to
confusion respecting the rule as to when a judgment of dis-
missal is required and when a minute order will suffice.

The judgment is so palpably void on the ground that as
a matter of law the court could not divest itself of jurisdic-
tion by the order in question, that I think it should be so
declared. Declarations respecting rules of law should, where
possible, be clear and positive. Otherwise complications are
bred and the application of law made more difficult, if not
more doubtful. Here no proof is required and no finding
of fact outside the face of the record is necessary. As a
plain mandate of the law the court had jurisdiction and
could not, by a mistaken order, divest itself thereof.

[Sac. No, 4623. In Bank—April 28, 1984.]

AMERICAN COMPANY (a Corporation), Appellant, v.
CITY OF LAKEPORT et al., Respondents.

a :
Py

550

Orrick, Palmer & Dahlquist for Appellant.

William H. Hazell, City Attorney, Norman E. Malcolm
and Leon Thomas David for Respondents.

a

E. C. Pyle, H. A. Postlethwaite, Samuel W. Gardiner,
Nutter & Rutherford, A. P. Hayne, O’Melveny, Tuller &
. Myers, James L. Beebe and Bowersock, Fizzell & Rhodes as
Amici Curiae on behalf of Appellants.

Everett W. Mattoon, County Counsel (Los Angeles), and
R. C. MeAllaster, Deputy County Counsel, Ray L. Chesebro,
City Attorney (Los Angeles), and F. Von Schrader, Assis-
tant City Attorney, Buron Fitts, District Attorney (Los
Angeles), and Robert J. Stahl, Deputy District Attorney,
Ralph W. Swagler, City Attorney (Burbank), James H.
Mitchell, Special Counsel (Burbank), A. L. Sebile, City
Attorney (Brawley), H. F. Orr, City Attorney (Ventura),
Hugh B. Bradford, City Attorney (Sacramento), Albert
Mansfield, City Attorney (Redwood City), Norman H. Mal-
colm, City Attorney (Palo Alto), Harold P. Huls, City
Attorney (Pasadena), Guy Lewis, City Attorney (Haw-
thorne), Richard C. Waltz, City Attorney (Beverly Hills),
J. Leroy Johnson, City Attorney (Stockton), Thomas M.
Carlson, City Attorney (Richmond), James M. Allen, City
Attorney (Yreka), E, L. Randall, City Attorney (Corning),
Fred ©. Hutchinson, City Attorney (Berkeley), C. A.
Raker, City Attorney (Alturas), Albert Lanner, City At-
torney (Brea), George R. Wing, City Attorney (Beaumont),
George R. Kirk, City Attorney (Calexico), R. K. Pierson,
City Attorney (Compton), A. F. Bray, City Attorney
(Concord), William S. Emmons, City Attorney (Culver
City), Waldo Willhoff, City Attorney (Colton), Arthur
Frame, City Attorney (Clovis), J. E. Greene, City Attorney
(Dinuba), Eugene Best, City Attorney (Elsinore), A. R.
Honnold, City Attorney (Escondido), Bernard Brennan,
City Attorney (Glendale), Roy H. Overacker, City Attor-
ney (Huntington Beach), Clyde Woodworth, City Attorney
(Inglewood), J. A. Isaacson, City Attorney (La Mesa), Mil-
burn D. Harvey, City Attorney (Laguna Beach), C. B.
Hubbard, City Attorney (Lynwood), Frank L. Perry, City
Attorney (Manhattan Beach), J. Harold Cragin, City At-
torney (Maywood), Louis H. Burke, City Attorney (Monte-
bello), Jesse W. Carter, City Attorney (Mt. Shasta City),
E. T. Maxwell, City Attorney (Mountain View), Roland
Thompson, City Attorney (Newport Beach), W. G. Me-
Keen, City Attorney (Oceanside), H. H. Jolliffe, City Attor-

55.

ney (Ontario), Raymond E. Hodge, City Attorney (Rialto),
Robert W. Harrison, City Attorney (San Anselmo), R. A.
Rapsey, City Attorney (San Bruno), D. M. Acres, City
Attorney (San Clemente), Clyde Downing, City Attorney”
(Santa Ana), J. F. Goux, City Attorney (Santa Barbara),
A. H. Blanchard, City Attorney (Santa Paula), T. W. Wil-
zinski, City Attorney (Sonora), Clyde Woodworth, City
Attorney (South Gate), Lloyd E. Hewitt, City Attorney
(Yuba City), Martinelli & Gardiner, Jordan L. Martinelli
and Samuel W. Gardiner as Amici Curiae on behalf of
Respondents.

THE COURT.—A rehearing was granted in this case in
order to give fuller consideration to the difficult questions
of constitutionality and statutory construction involved.
Upon such consideration, we adhere to and adopt the follow-
ing part of our former opinion:

“This is an appeal from a judgment of the superior court
of Sonoma county, sustaining, without leave to amend, re-
spondents’ demurrer to petitioner’s application for a writ
of mandate. The case involves the construction and con-
stitutionality of certain sections of the Improvement Bond
Act of 1915.

“In 1925 the City of Lakeport commenced proceedings
under the Improvement Act of 1911 (Stats. 1911, p. 730;
Deering’s Gen. Laws, 1931, Act 8199) to improve Main
street in said city. Its resolution of intention declared
that the work would be paid for by special assessments
levied upon an improvement district described therein. The
contractors performed the required work, but the property
owners failed to pay the assessments. Thereupon the con-
tractors procured the issuance of bonds to them, evidencing
the unpaid assessments, under the Improvement Bond Act
of 1915 (Stats. 1915, p. 1441; Deering’s Gen. Laws, 1931,
Act 8209). Assessments which became due in 1927, 1928,
and 1929 were not paid, and in accordance with section 12
of said act, a sale of the properties was held. No purchaser
appeared, and the tax collector made an entry reciting a
sale to the state. Petitioner became the assignee and holder
of delinquent bonds in the principal amount of $9,755.33,
and sought to compel the city to levy taxes to provide funds
for the payment thercof. The petition alleges that the city
-and city treasurer have failed and refused to transfer money

Ss  :

from the city treasury into the bond redemption fund, and
that the tax collector has failed to demand and the city
has failed to levy or collect any tax to pay the delinquent
assessments. Respondents demurred to the petition on three
chief grounds: First, that the statute imposes no mandatory
duty on the city to provide such funds by taxation; second,
that if such a mandatory duty does exist, the statute im-
posing it is unconstitutional; and third, that if any such
valid obligation exists, it is limited in amount to ten cents
on each one hundred dollars of assessable property. The
lower court in an elaborate opinion considered these issues,
and held that sections 12 and 16 of the act were unconstitu-
tional solely on the grounds that they constituted a denial
of due process of law. We are unable to agree with this
conclusion, and are of the opinion that the statute is

“It' is first necessary to state the important provisions
of the statute. The Improvement Bond Act of 1915 pro-
vides a method of issuing bonds to represent assessments,
the assessments being levied under some other statute such
as the Vrooman Act of 1885, the Street Opening Act of
1903, or the Improvement Act of 1911. (Improvement
Bond Act, secs. 1, 2.) These other statutes provide for the
levy of assessments, and the Improvement Act of 1911 also
permits bonds to be issued; but the assessments or bonds
under said act are in specific sums on particular parcels of
property, usually in odd denominations, and payable on
varying dates. The Improvement Bond Act of 1915 pro-
vides for a more marketable type of security, bonds issued.
serially in even denominations, secured by assessments pay-
able at the same time and in the same manner as general
taxes. (Secs. 6, 8.) The unpaid assessments constitute a
trust fund for the payment of principal and interest of the
bonds. (Sec. 11[a].) When an assessment becomes due
and is unpaid, the methods of enforcement indicated in sec-
tions 11, 12 and 16 become applicable.

“Section 12, which is the provision invoked by petitioner,
reads in part as follows: ‘Upon default in payment, the
lands securing such instalments and assessments shall be sold
im the same manner in which real property in such city is
sold, for the nonpayment of general municipal taxes, and
be subject to redemption within one year from date of sale

es

in the same manner as such real property is redeemed from
such delinquent sale, and upon failure of such redemption
shall in like manner pass to the purchaser. The city may
be the purchaser at any delinquent sale in like manner in
which it becomes or may become the purchaser of property
sold for nonpayment of the general municipal property
tax, and in the event of its so becoming the purchaser shall
pay and trarsfer into said redemption fund the amount of
the delinquent assessment and of the delinquent interest
thereon upon which said sale is made. In cases where the
municipal property tax is collected by county or city and
county officials and sales for nonpayment of such taxes
are made to the state, the state shall be the purchaser at
any such sale hereunder, but shall hold the title acquired
at such sale upon behalf of the city and shall account to
the city for any moneys received upon redemption or from
the sale of such property, the city for the purposes of this
act being deemed the real purchaser.’ This last provision
applied to respondent city, the taxes of which are collected
by the county tax collector. The section further provides:
‘In the event of there being no available funds in the treas-
ury with which to make such payment, the tax collector
shall delay the entry of the certificate of sale until such
funds are available, making demand in the meantime woon
the city council that a suitable amount be included in the
neat tax levy for the purpose of providing funds with which
to make such payment; provided, however, that the period
of redemption from such tax sale shall not be extended
thereby nor the rights or privileges of the property owner
be thereby in anywise affected.’

“Section 11, subdivision (c), provides that for nonpay-
ment of any assessment or instalment, upon order of the
city council, the same may be collected by a foreclosure suit
in the superior court. This is declared to be ‘a cumulative
remedy’.

“Section 16, subdivision (a), provides: ‘The city council
may, and in the event of demand by the tax collector there-
for as provided in section twelve hereof must, at the time
of fixing the annual tax rate and levying the taxes to be
collected for general municipal purposes, levy a special tax
upon the taxable property in the city for the purpose of
paying for the lands purchased or to be purchased at such

ll

tax sales, but not to exceed for each local improvement
ten cents on each one hundred dollars of assessable property.’

“hese are the relevant provisions of the statute which is
under dispute. The attack which respondents make upon
it relates to its constitutionality, and also to its interpreta-
tion. Numerous amici curiae have appeared on both sides
of the controversy, and these are not wholly in agreement
upon the grounds for their respective positions. However,
as to the constitutional questions, there is no dearth of
authority in point, and we therefore proceed first to their
solution.

HM ‘Article XI, section 12, of the California Constitu-
tion, reads as follows: ‘The legislature shall have no power
to impose taxes upon counties, cities, towns or other public
or municipal corporations, or upon the inhabitants or prop-
erty thereof, for county, ‘city, town, or other municipal
purposes, but may, by general laws, vest in the corporate
authorities thercof the power to assess and collect taxes for
such purposes.’ The contention of respondent is that the
statute violates this section in that the legislature has im-
posed a tax upon the property within the city for a purely
municipal purpose. But it is clear that the legislature has
not, by sections 12 and 16, levied a tax. It has merely
fixed the liability of the city to pay for property purchased,
and has required the city to levy and collect taxes in an
amount suitable for this purpose. In several cases arising
under statutes having similar provisions, it has been held
that there was no interference with the powers of the
municipality. (MacMillan Co. v. Clarke, 184 Cal. 491 [194
Pac. 1030]; People v. Lodi High School Dist., 124 Cal. 694
[57 Pac. 660]; Hallahan v. City of Port Angeles, 161 Wash.
353 [297 Pac. 149].) In the last-named case the court
said (297 Pac. 150): ‘Nowhere in the act is there any im-
position of a tax upon the city, or the inhabitants thereof,
but the act makes it a condition precedent to the ordering
of a local improvement, and the payment thereof by local
assessments, that the guaranty fund shall be created. The
city may or may not order a local improvement, but, if it
does, the assessment for the benefit of the guaranty fund
must be made, and this is imposed by the city and not by
the act of the legislature. Since the tax is imposed by the

6 es

city and not by the legislature, the act is not in conflict
with... the Constitution...”

HHI ‘‘Section 13 of the same article of the Constitution
is also invoked by respondents. It provides that the legis-
lature ‘shall not delegate to any special commission, private
corporation, company, association or individual’ the power
to levy taxes or assessments. This section is inapplicable
to a municipal corporation, and hence constitutes no objec-
tion to the statute. (Gadd v. McGuire, 69 Cal. App. 347
[231 Pac. 754]; City of Oakland v. Garrison, 194 Cal. 298
[228 Pac, 433].)

Hl ‘‘Acticle IV, section 31, of the Constitution, prohibits
any gift or loan of public moneys; and it is argued that if
the city is compelled to pay the delinquent assessments, it
will thereby make a gift of public funds to private bond-
holders. This precise question was considered by us in
Stege v. City of Richmond, 194 Cal. 305 [228 Pac. 461],
and we there said (194 Cal. 318): ‘The argument assumes
that in the improvement of the streets the work is a private
matter. On the contrary, such work is for a public purpose.
The city might have expended its general funds for the
purpose.’ It is well settled that funds directed toward a
publie purpose are not within the constitutional prohibition
merely because of incidental benefits to individuals. (Vet-
erans’ Welfare Board v. Jordan, 189 Cal. 124 [208 Pac.
284, 22 A. L. R. 1515].) In a similar case, Stanley v.
Jeffries, 86 Mont. 114 [284 Pac. 184], the court said (284
Pac, 138): ‘But the laying out and improvement of streets,
alleys, sewers and the like is essentially a public purpose
benefiting the entire community although the work is done
in but a portion of the city, and in the absence of any
legislative restriction, each portion of the city might be
thus improved at the general public expense, and no tax-
payer could be heard to complain thereof. In other words,
in order to erect any public improvement by the creation of
special improvement districts, both general benefits to the
municipality and special benefits to the particular property
must be conferred . . . When, therefore, the legislature pro-
vided that, as to special improvement districts created in
the future a fund shall be created to insure the prompt
payment of bonds and warrants issued in payment of such
improvements, it but modified the special improvement dis-

Se

trict law to impose upon the general public within the
municipality a conditional obligation to pay a small portion
of the cost of erecting the public improvement, whereas it
might have lawfully imposed a much greater burden upon
the municipality. . . . That the purchasers of bonds or war-
rants shall in the future have greater security for the pay-
ment thereof than they have had in the past, is but incidental
to the public purpose of the act before us, and does not
militate against its validity.’ (See, also, Imboden v. City
of Bristol, 182 Tenn. 562 [179 S. W. 147].)

HI ‘‘Article XI, section 18, of the Constitution, pro-
hibits a city from incurring ‘any indebtedness or liability
in any manner or for any purpose exceeding in any year the
income and revenue provided for such year, without the
assent of two-thirds of the qualified electors...’ It is
contended that the liability imposed by sections 12 and 16 of
the act is violative of this provision. The answer to this
objection has already been given in several prior decisions
in this state, and it is briefly, first, that the constitutional
provision does not apply to an obligation or liability imposed
by law as distinguished from one incurred voluntarily by
the municipality; and second, that the liability under the
act is not direct, but dependent upon several contingencies,
namely, that the assessment become delinquent; that no
person appear at the sale to purchase the property; and
that the owner fail to redeem it after sale.

“The rule that the inhibitions of the constitutional debt
limit do not apply to contingent obligations has long heen
settled in this state. In Doland v. Clark, 148 Cal. 176 [76
Pac. 958], where a city by certain contracts agreed to
pay for certain services for five years at a monthly rate,
-it was held that there was no violation of article XI, section
18, the court saying: ‘It is evident that they (the contracts)
did not create any liability at the time they were executed,
except a contingent future liability... . The amounts to
become due on completion of the contracts by appellant
might never become a liability upon the city. A sum pay-
able upon a contingency is not a debt nor does it become
a debt until the contingency happens. ... There may be
ample funds to pay the rental when it accrues, as provided
in the contracts, if it ever should acerue.’ (See, also,

5

McBean v. Fresno, 112 Cal, 159 [44 Pac. 358, 53 Am. St.
Rep. 191, 81 L. BR. A. 794].) .

“Tt is contended, however, that the obligation, contingent
at the time the bonds were issued, became fixed and certain
upon the happening of the contingency—the occurrence of
the delinquencies—and that the unconstitutionality thereof
is now established. It is readily apparent that the happen-
ing of the contingency docs not constitute the ‘incurring’
of a ‘debt’ within the meaning of the constitutional provi-
sion. The validity of the obligation must be determined
as of the time it was incurred. Otherwise, the whole doc-
trine of contingent liability is repudiated, since upon the
happening of the contingency an obligation validly assumed
becomes illegal. Cases from other jurisdictions, involving
the contingent obligation of a municipality to meet delin-
quencies in a bond redemption fund, have uniformly held
that no violation of constitutional debt limitations resulted.
(See Comfort v. City of Tacoma, 142 Wash. 249 [252 Pac.
929]; Kelly v. City of Sunnyside, 168 Wash. 95 [11 Pac.
(2d) 230]; Corey v. City of Fort Dodge, 188 Iowa, 666 [111
N. W. 6].)

“‘A more conclusive answer to the objection is found in
the rule that the constitutional debt limit applies only to
obligations voluntarily assumed by the city, and not to those
imposed by law. The general principle is well settled. In
Lewis v. Widber, 99 Cal. 412 [83 Pac. 1128], the constitu-
tional provision was held inapplicable to salaries of public
officers fixed by statute. In City of Long Beach v. Lisenby,
180 Cal. 52 [179 Pac. 198], it was held inapplicable to a
Hability resulting from a judgment against the city for a
tort. (See, also, Mills v. Houck, 124 Cal. App. 1 [12 Pac.
(24) 101].) :

" ‘Phat the present obligation to feed the bond redemption
fund by taxes is not voluntary, but imposed by statute,
seems too clear for dispute. It is true that the city might
have accomplished its street work by a general tax levy, or
left it undone altogether. But the statute under which the
city acted was intended to provide a reasonable method of
doing street work, and no penalty should be imposed upon
it for availing itself of the procedure. By doing so, it did
not voluntarily incur an obligation. At the time it com-
menced the work, the liability was contingent only. Later,

es

when the contingencies occurred, a liability was imposed
upon the city by the statute, and not by any voluntary act
on its part. This point has already been considered and
determined by the decisions in three prior California cases,
each dealing with the statute now before us. In the first
of these, Federal Const. Co. v. Wold, 30 Cal. App. 360
{158 Pae. 340], the court observed that the liability under
the Improvement Bond Act of 1915 was contingent and
hence not within the constitutional restriction. The opinion
also states (30 Cal. App. 361): ‘ ... it has been held that
this section of the Constitution only refers to the acts or
contracts of a municipality, and not to the liabilities which
the law places upon municipalities. (Lewis v. Widber, 99
Cal. 412 [33 Pac. 1128]; Welch v. Strother, 74 Cal. 413 [16
Pac. 22]; Cashin v. Dunn, 58 Cal. 581.’ In the second case,
Stege v. City of Richmond, 194 Cal. 305, 318 [228 Pac.
461], we said: ‘The city might have expended its general
funds for that purpose. It was not compelled to do so
and when it elected to proceed under the general street
improvement laws, it simply adopted the means provided
by law whereby it might in accordance therewith exercise
a public function without incurring a contractual liability
such as is contemplated under section 18 of article XI of
the Constitution and the Bond Act of 1901. When the city
elects to proceed under said act it assumes the burden of
discharging its duties thereunder to the end that the assess-"
ment may be enforced. (See Federal Const. Co. v. Wold,
30 Cal. App. 360 [158 Pac. 340].)?

“The third case, City of Pasadena v. McAllaster, 204 Cal.
267 [267 Pac. 873], is cited to us by both petitioner and
respondents. In it this court gave full consideration to the
particular question now before us, and declared the prin-
ciple hereinbefore stated. The facts were peculiar in that
certain land owned by the city had been included in an
assessment district. It was held that the liability to meet
the assessments on such land was direct and not contingent.
This determination was carefully limited to municipally
owned property, for as to such property the municipality
assumed a primary liability to pay the full amount of the
assessment, just as any other land owner, instead of a con-
tingent liability to feed a bond redemption fund in the
event of delinquencies. In distinguishing Stege v. Rich-

560 |

mond, supra, and approving Federal Const. Co. v. Wold,
supra, we said (204 Cal. 277): ‘In the Federal Construction
Company case it was held that the obligation of the munici-
pality to purchase all property offered at delinquent sales
for the nonpayment of street assessments, in the absence
of other purchasers, pursuant to the Improvement Act of
1911 (Stats. 1911, p. 780), and the Improvement Bond Act
of 1915 (Stats. 1915, p. 1441), was an obligation imposed
on the city by law and was not a liability prohibited by the
constitutional provision. In such a case the payment out of
the public treasury is for'the purpose of a loan or advance-
ment to facilitate and make effectual the proceedings under
the act and which the city later may recover.’ (Italics
ours.) .
“The foregoing decisions, in our opinion, have established
the validity of the bonds as against this ground of attack.
" “Tt is finally urged by respondent, and the lower
court held, that sections 12 and 16 of the statute constitute
a denial of due process of Jaw in violation of both the
California and United States Constitutions. The theory
is that if all the property owners in the city are to be taxed
to meet the delinquent assessments, those outside the district
are, in effect, being subjected to an assessment in the guise
of a tax; and that such an assessment is invalid where they
have had no notice or hearing as to any benefits which they
are to derive from the particular improvement. The con-
clusion of the lower court that the tax was, in fact, an
assessment, is unwarranted. The overwhelming weight of
authority supports such a tax on two chief grounds: First,
where a tax is imposed upon all property without regard to
benefits received, it is a tax and not a special assessment,
regardless of its purpose; and second, where a general tax
is levied to meet delinquencies in assessments for Jocal im-
provements, there is no necessity for notice and hearing.
The basic principle was clearly stated in a decision of this
court: ‘Where... the burden is imposed upon all of the
property in the district, real and personal, according to its
value and not upon the basis of special bencfit it is clear
that the legislature regarded the burden as a general tax
and not as a special assessment. This is so even though
the tax be imposed for the purpose of constructing a public
improvement which may confer greater benefits on one class

a

of persons or property than on another.’ (Anaheim Sugar
Co. v. County of Orange, 181 Cal. 212, 216 [183 Pac.
809].) In People v. Whyler, 41 Cal. 351, 354, the court
said: ‘The funds to pay for the grading of a street, may
be raised by taxes levied upon all the property of a town,
should the law so direct; but the tax does not become an
assessment, because the latter is the mode usually adopted
to raise the funds for that purpose. There is no sufficient
reason for holding that the charge is not, what the legisla-
ture declared it to be—a tax.’ (See, also, Williams v.
Corcoran, 46 Cal. 553; Sinton v. Ashbury, 41 Cal. 525;
Cowart v. Union Pav. Co., 216 Cal. 375 [14 Pac. (2d) 764,
83 A. L. R. 1185].)

“In other jurisdictions the precise question has been
presented, namely, whether a municipality may constitu-
tionally levy a general tax to meet delinquencies in special
assessments for local improvements; and it has been uni-
formly decided in the affirmative. In Wicks v. Salt Lake
City, 60 Utah, 265 [208 Pac, 538], the statute provided for
improvement bonds payable out of special assessments
against the property benefited, but provided also. for a
general tax to create a guaranty fund, to meet bond pay-
ments whenever the money derived from assessments proved
insufficient. It was objected that the general taxing power
could not be used to guarantee special improvement bonds
without submitting the question to a vote. The court up-
held the statute, saying (208 Pac. 540): ‘The city had the
undoubted right, if it chose so to do, to provide for the
lighting of the street in question and ease the burden thereof
on the taxpayers of the entire municipality. It was not
under the necessity of creating a special improvement dis-
trict at all, It was not incumbent upon the city to impose
the burden exclusively upon the owners of the abutting
property. How, then, can it be consistently contended that
the city is without power, especially when authorized by
the legislature, to provide a special guaranty fund for the
payment of the bonds in question, and interest, in the re-
mote contingency that the necessary funds cannot be
obtained from assessments made upon the abutting prop-
erty?’ The same question, and the same answer are found
in Comfort v. City of Tacoma, 142 Wash. 249 [252 Pac.
929, 930]: ‘It is next urged that to tax appellants’ prop-

P|

5.

erty, which receives no special benefit, to guarantee a pay-
ment of bonds issued against other property, is contrary
to law, because the whole theory of local assessments is one
of special benefits to the property assessed. But this is
not a special assessment. The city has the right to initiate
local improvements and to pay the whole cost thereof out
of general taxes. This tax is imposed on all alike, and is
general in its application.’ To the same effect are numerous
other decisions. See State v. Board of Commrs., 124 Ohio
St. 174 [177 N. BE. 271]; Stanley v. Jeffries, 86 Mont. 114
[284 Pac. 184, 70 A. L. R. 166]; Klemm v. Davenport, 100
Fla. 627 [129 So. 904, 70 A. L. R. 156]; and cases collected
in note, 70 A. L. R. 176. These decisions establish the
principle that where public improvements of the character
under consideration could be made by the use of ordinary
funds derived from general taxation, without notice and
hearing as to individual benefits resulting therefrom, de-
ficiencies in any fund raised by local assessments may like-
wise be met by general taxation. It should be noted, also,
that the method employed by our statute is in effect an
advancement of funds, which the city may normally be
expected to recover upon resale of the lands secured at the
delinquent sales. (See Pasadena v. McAllaster, supray
Municipal Imp. Co. v. Thompson, 201 Cal. 629 [258 Pace
955].)

HI ‘We come now to the final problem, that of inter-
pretation of sections 11, 12 and 16 of the statute, and the
relation each bears to the others. It is first contended by
respondents that there is no mandatory duty to levy taxes
under sections 12 and 16, since the city may, at its election,
proceed to foreclose under section 11 (¢). The answer to
this is found in the statute itself, which expressly declares
the provision for foreclosure to be a cumulative remedy.
It is different in character and procedure, and is slower,
more expensive and less efficient than the tax sale. While
it may perhaps be resorted to either before or after a tax”
sale, the commencement of foreclosure proceedings eannot,
under the act, be deemed an excuse for nonperformance of
any duty under sections 12 and 16, to levy taxes to pay for
property purchased. Under section 12 the city, through
the agency of the state, becomes the real purchaser of the
property at the sale. It thereupon becomes the duty of the

Ss
eity, as such purchaser, to pay the amount of the assessment
into the redemption fund; and if it has no funds with
which to do so, then the taxing provisions are applicable.
‘We find no merit in this point.’’

Hi The other point, in our opinion, presents the most
difficult question in this case. Section 12 provides that
when there are no available funds in the city treasury with
which to pay for property purchased at the delinquent sale,
the tax collector shall make demand upon the city council
that a “‘suitable amount’’ be included in the next tax levy
to provide funds with which to make such payment. Sec-
tion 16, subdivision (a), states that the city council must,
upon demand by the tax collector as provided in section 12,
levy a ‘‘special tax’’ for the purpose of paying for lands
“purchased or to be purchased’’ at such tax sales, but ‘‘not
to exceed for each local improvement ten cents on each one
hundred dollars of assessable property’’. The question is
whether section 16 (a) operates as a limitation on the
amount of tax, so that the maximum which might be levied
each year for the purposes stated would be ten cents on
each one hundred dollars of assessable property. This issue
has been briefed and argued several times by able counsel
for the parties and amici curiae, and it may be reasonably
concluded that the various possible interpretations of these
sections have been fully explored. Notwithstanding this
thorough consideration, there remains the gravest doubt as
to the intention of the legislature to provide an unlimited
tax, and we have finally come to the conclusion that this
doubt must, in accordance with settled principles, be re-
solved against the taxing power and in favor of the tax-
payer.

The arguments of counsel for the bondholders in favor
of an unlimited tax proceeds by pointing out that the city
must, under section 12, purchase the property at the sale,
and pay the delinquent assessments; that in order to do so,
it must transfer available funds from its treasury into the
bond redemption fund; and that the tax collector must
then make demand for a tax levy in a ‘‘suitable amount’?
to provide funds with which to make such payment. From
these provisions of the statute they draw the conclusion
that there is a mandatory duty on the part of the city to
meet by a sufficient tax levy the obligation assumed by the

|

purchase of the lands. Under this theory, section 16 (a)
is explained chiefly as a means of collecting limited sums
in anticipation of the future purchase of lands.

The objection to this construction is that it gives too
much effect to section 12, and not enough effect to section
16 (a). Section 12 provides that when there are no avail-
able funds in the treasury, the tax collector shall delay the
entry of the certificate of sale until such funds are avail-
able, ‘‘making demand in the meantime upon the city coun-
cil that a suitable amount be included in the next tax levy
for the purpose of providing funds with which to make
such payment”’. It will be observed that this section pro-
vides for a demand for a tax levy, but not for a tax. The
section gives no authority to the city council to levy any
tax. It may be argued that it would be absurd to require
the city to purchase the property, and then provide for no
means of payment; and that from the obligation to pur-
chase and the duty of the tax collector to make a demand
for a tax levy, the municipal power to levy the tax may be
inferred. [J] But the imposition of a tax by inference
or implication, no matter how logical or reasonable it may
seem, is universally condemned by the authorities, which
lay down the rule that the tax must be based upon an
express statutory authority, and that doubts will be re-
solved against the taxing power. (See Merced County v.
Helm, 102 Cal. 165 [86 Pac. 399]; Connelly v. San Fran-
cisco, 164 Cal. 101 [127 Pac. 834]; Estate of Potter, 188
Cal. 55 [204 Pac. 826]; Whitmore v. Brown, 207 Cal. 473
[279 Pac. 447].) In any event, the supposed necessity for
the inference of the power to tax from the provisions of
section 12 arises from a failure to give adequate considera-
tion to section 16 (a).

Section 16 (a) does expressly authorize the levy of a tax.
It provides that the city council ‘‘may’’ levy ‘‘a special
tax’? to pay for lands ‘‘purchased or to be purchased’’,
The authority thus given is within the discretion of the
council to exercise, and there is little doubt that under that
authority, the city may build up a fund in anticipation of
the futwre purchase of lands. But this is not the whole
effect of section 16 (a). It provides that the, city council
“may, and in the event of demand by the tax collector
therefor as provided in section twelve hereof must’? levy

es

the tax. Here we have a mandatory requirement. It di-
rectly refers to section 12; it expressly covers the subject
upon which section 12 is silent—the power to levy a tax;
and to remove any doubt as to the interdependence of the
two sections, it conditions the levy of the tax under section
16 (a) on the demand of the tax collector under section 12.

Under this analysis, which gives to both sections the
meaning apparent therefrom, and does not extend nor
diminish the effect of either by implication, we have a
construction which is not unreasonable, and which violates
no rule of statutory construction. Such an interpreta-
tion, moreover, avoids the cardinal error of imposing a
tax by inference from language which does not clearly
authorize it. There are, perhaps, as contended by peti-
tioner, certain practical difficulties which may follow from
this conclusion. Thus, where there are ample funds in the
treasury, previously raised by taxation, the whole of the
delinquent assessment must be paid out of such funds, sec-
tion 12 providing that the city ‘‘shall pay and transfer
into said redemption fund the amount of the delinquent
assessment and of the delinquent interest thereon’’; but
if the treasury is depleted, only the ten-cent levy under
section 16 (a) can be made; with the result that the im-
mediate payment in full of the delinquent assessments, a
duty resting upon the city under section 12, is dependent
upon the fortuitous circumstance that money is in the
treasury and available at the time of purchase. But upon
reflection, this is not wholly unreasonable. It may well be
that the city should be required to meet its obligation under
the statute in full with available funds, if they are suffi-
cient in amount, but that it should not be forced to meet
it, when sufficient funds are not available, by a ruinous tax.
Such a distinction could well have been within the contem-
plation of the legislature, and the alleged inconsistency con-
stitutes no fundamental objection to the construction we
have adopted.

It follows that the statute under consideration is con-
stitutional, and that if the allegations of the petition are
true, a mandatory duty rested upon respondents to levy
and collect a tax to meet the delinquent assessments, such
tax, however, being limited to ten cents on each one hun-
dred dollars of assessable property, as provided in section

560

16 (a) of the act. The judgment is therefore reversed, with
directions to the lower court to permit petitioner, if it
desires, to amend its petition in accordance with the conclu-
sions reached herein, and thereafter to proceed to a trial of
the issues, if any, raised by the answer thereto.

(S. F, No, 14958. In Bank—April 28, 1934.]

AMERICAN SECURITIES COMPANY (a Corporation),
Petitioner, v. JOHN F. FORWARD, Jr., et al, Re-
spondents.

568

Orrick, Palmer & Dahlquist for Petitioner.

C. L. Byers, City Attorney, Gilmore Tillman, Assistant
City Attorney, Thomas Whelan, District Attorney, and
James B. Abbey, Frank T. Dunn and E. I. Kendall, Depu-
ties District Attorney, for Respondents.

Harold Jacoby, as Amicus Curiae on Behalf of Respond-
ents.

THE COURT.—A hearing was granted in this case in
order to give further consideration to the question whether
the statute imposes a mandatory duty to levy a tax suffi-
cient to cover past due principal and interest on the bonds
as well as that to become due prior to the next annual levy.
We hereby adopt the following portion of our former opin-
ion as a proper statement of facts and determination of
other issues:

“Mandate to compel either the respondent city council
of the city of San Diego or the respondent board of super-
visors of the county of San Diego to levy, at the time of
the next general tax levy for municipal or county purposes,
upon all of the lands within Municipal Improvement Dis-
trict No. 1 im said city, a special assessment tax in an
amount clearly sufficient to pay all of the principal and
interest which has become due or will become payable on

3:

bonds of the district heretofore issued, before another tax
levy for municipal or county purposes can be made avail-
able for the payment of principal and interest on said
bonds.

“Municipal Improvement District No. 1 was organized
under the Acquisition and Improvement Act of 1925 (Stats.
1925, p. 849), and pursuant to a resolution of intention
adopted by the city council of the city of San Diego on
August 20, 1928. The purpose of the proceedings was to
acquire rights of way and to construct two bridges and a
causeway over Mission bay with street improvements at
the approaches of said bridges. The estimated cost of the
improvement was $725,000 and upwards. The proceedings:
were carried forward by the city council of said city, the
contract was let and the contractors entered upon the per-
formance of the work. Certain property owners affected
commenced an action to enjoin the performance of the con-
tract. After trial on the merits the court found for the
defendants and entered judgment accordingly. On appeal
by the plaintiffs the judgment was affirmed on February
25, 1931. (Southlands Co: v. City of San Diego, 211 Cal.
646 [297 Pac. 521].) Bonds were issued by the city treas-
urer as provided in the act in the principal sum of $787,-
418.34, all dated January 21, 1931. The first principal
amount of $46,000 will accrue on January 21, 1936, and
the last on June 21, 1951. On July 2, 1932, the first semi-
annual interest coupons attached to said bonds matured and
there became due and payable on account of said interest
thereon the sum of $64,030.01. On September 1, 1931, the
board of supervisors of said county, for the purpose of
raising funds: for the payment of said interest when it
should become payable, levied against the property in the
district a special assessment tax at a rate caleulated to
raise the sum of $71,835.95, or 11.2 per cent more than
required if collected in full.

“On January 2, 1933, there became due and payable
on account of interest coupons then maturing the sum of
$22,122.55 and a like sum on July 2, 1933, or a total for
this year of $44,245.10. On September 1, 1932, the board
of supervisors for the purpose of paying interest coupons
maturing in 1933 levied a special assessment on lands in
the district sufficient to raise, if collected in full, the sum

570 |

of $49,288.34, or approximately 11.2 per cent more than
the amount required to pay the 1933 interest coupons. Of
said levies made in 1931 and 1932 there remain unpaid
and delinquent at this time certain individual assessments
totaling approximately $31,259.18, or about 25.8 per cent
of the total levies made for the two years. The petitioner
is the owner of said bonds in the principal amount of
$74,000 and it is alleged in the petition that the total now
unpaid on account of the interest coupons on all of the
bonds of the district, including its own, is $28,660.

“The petitioner prays that the court determine which
legislative body, the city council of the city or the board of
- supervisors of the county, is the legislative body required
by law to levy assessment taxes to satisfy the principal and
interest on said bonds, also that when the proper legisla-
tive body is determined upon, the court compel said legis-
lative body to levy a tax for the year 1938-1934 sufficient
to pay not only the interest coupons maturing on January
2 and July 2 in the year 1934, but also to pay the amount
unpaid on the interest coupons for the years 1932 and 1933.

HI ‘The question as to which legislative body is the
proper one to levy the assessment tax is not difficult of
solution. The city council of the city initiated the proceed-
ings and all of the steps taken thereafter in carrying the
improvement to completion were taken by it or under its
direction or by officers of the city, including the establish-
ment of the extent of the assessment district and the sev-
eral assessment zones therein, the hearing and passing upon
protests on behalf of numerous property owners in the dis-
trict, the letting of the contract and supervision of the work
as it progressed, the acceptance of the work, the issuance of
the bonds to represent the cost of acquiring property and
of the improvement. The board of supervisors had nothing
to do with the proceeding until, for some unaccountable
reason, that board assumed the power to levy the assessment
taxes in 1931 and again in 1932. Section 2 of the act of
1925 provides ‘that the legislative body initiating the pro-
ceeding and adopting the resolution of intention therefor,
as hereinafter provided, shall thereafter have exclusive
jurisdiction of the proceeding’. That the levy and collec-
tion of the assessment taxes to satisfy the coupons for inter-
est and principal on the bonds issued to represent the cost

So

of the improvement are part and parcel of ‘the proceeding’
as contemplated by the act can admit of no doubt. A read-
ing of the statute demonstrates that the legislative body
which initiates the proceeding is the only one having juris-
diction to complete it and the provisions of the act with
reference to the issuance of bonds for the cost of the work
and the levy of assessment taxes to satisfy the same are
inseparably a part of the plan for the accomplishment of
which the statute was created.

i | “Of course ‘the legislative body initiating the pro-
eeeding’ must be the legislative body duly constituted under
the terms of the act in order that the proceeding be regular.
Whether the city council of the city of San Diego was au-
thorized under the act to initiate and carry forward this
particular proceeding was one of the main issues determined
in Southlands Co. v. City of San Diego, supra. It was con-
tended by the city in that case that its legislative body was
the proper one to initiate and conduct the proceeding. This
contention was upheld. A holding to the contrary would
have required a reversal of the judgment in that case. The
city is in no position to relitigate that question. It has
become definitely settled. (Price v. Sixth Dist. 201 Cal.
502 [258 Pac. 387].) It therefore appears beyond question
that the respondent city council is the legislative body hav-
ing exclusive jurisdiction to levy said assessment taxes.’’

HE The important question presented by this appeal
is whether there is a mandatory duty on the part of the
appropriate legislative body, which is, as we have seen, the
city council, to levy a tax sufficient to pay principal and
interest already due and delinquent, as well as that to
become due in the ensuing tax year. In other words, does
the act require the ‘‘cumulating”’ or ‘‘pyramiding’’ of the
assessments? ‘The constitutionality of such cumulative levies
is beyond question. (See Municipal Imp. Co. v. Thompson,
201 Cal. 629 [258 Pae. 955]; O. T. Johnson Corp. v.
County of Los Angeles, 128 Cal. App. 440 [17 Pac. (2d)
792]; Roberts v. Richland Irr. Dist., 289 U. 8. 71 [53 Sup.
Ct. 519, 77 L. Hd. 1038].) The question is therefore to be
answered by a construction of the terms of the statute.

A preliminary point raised by respondents, which
should first be disposed of, is that the time for making the
annual tax levy for the fiscal year 1933-1934 expired on

2 mn

August 29, 1933, and that consequently the right to the re-
lief demanded in the petition is a moot question. It is
well settled that the obligation to levy such an ad valorem
tax is a continuing one; and where by reason of the negli-
gent or wilful refusal of the city to perform its duty during
a particular year, or for other reasons the time for the
levy of such tax elapses, the duty remains and the tax must
be levied in the following or any subsequent year when
it is possible to do so. This point was given thorough
consideration by us in Pasadena Junior College Dist. v.
Board of Supervisors, 216 Cal. 61 [13 Pac. (2d) 678], and
the holding therein is determinative in the instant case. The
petition prays for a writ requiring the levy at the time
of the next general tax levy ‘‘and for each succeeding year
thereafter’’ in a sufficient amount to pay past due and ac-
- eruing principal and interest. This is a proper pleading
to secure the relief demanded, if such relicf is appropriate.
HH Section 41 of the statute before us, which is the
principal section dealing with the enforcement of the bonds,
provides in subdivision 1 that ‘‘there shall each year at the
time of levying taxes for general municipal purposes be
levied by the legislative body of such municipality against
and upon all of the lands within said district a special
assessment tax in an amount clearly sufficient, together with
any moneys which are or may be in said fund, to pay all
the principal which has become or will become payable and
all interest which has become or will become payable on the
bonds issued under the proceeding before the proceeds of
another tax levy made at the time of the next general tax
levy for general municipal purposes can be made available
for the payment of said principal and interest’’, This sec-
tion in express terms makes it mandatory upon the city to
levy a tax, the amount of which must be ‘‘clearly sufficient’’,
when added to certain other moneys, to pay delinquent
principal and interest, as well as principal and interest to
become due during the year. The phrase ‘‘has become...
payable’? unquestionably covers delinquencies. The duty
to cumulate assessments, therefore, is laid down in section
41, subdivision 1.
This duty is neither qualified nor limited by other pro-
visions. Section 41, subdivision 7, provides that whenever
the bonds or payments of interest or principal thereon

Ss

“shall become due’’, and there is not sufficient money in
the interest and sinking fund to pay the same, the legisla-
tive body ‘‘may, pending the levy and collection of a special
assessment tax therefor, order the amount of money neces-
sary to pay said bonds, or payment of principal or interest
so falling due, to be transferred from the general fund
. .. to said interest and sinking fund, and the amount of
money so transferred shall be deemed a loan .. . and shall
be repaid to the general fund from the first money coming
into said interest and sinking fund thereafter’’. The pur-
pose of the discretionary power thus given the municipality
to make a loan to a depleted special fund is apparent from
the express language of the provision. It is to prevent a
default, and is temporary, ‘‘pending the levy and collec-
tion’? of the tax. No intent to substitute the loan for the
tax is indicated. Instead, the duty to levy the tax, im-
posed by subdivision 1, is again recognized by the language
above quoted, and by the introductory sentence of subdivi-
sion 7, which states that “In any event, it shall be the duty
of the legislative body, which is required by this section to
levy the special assessment tax, to levy a special assessment
tax upon all of said lands within such district clearly suffi-
cient to pay the principal and the interest of said bonds
as the same shall become payable, and said legislative body is
hereby vested with power and jurisdiction to do all and
singular the things which in this section aforesaid it is
declared shall be done by it.”

The same insistence upon the mandatory duty to tax, in
spite of provision for other methods of securing moneys
temporarily, is found in section 41, subdivision 6, which
provides that the municipality ‘‘may’’ transfer from the
general fund or from any fund which may be used for
acquisitions or improvements of a similar character, to the
interest and sinking fund, such amount as in its judgment
should be transferred. Subdivision 6 then states: “‘It is
the intention of this provision that further assistance in
addition to that . .. which may be given as elsewhere pro-
vided in this act, may be given by the... municipality

. . and apart from the loans, and apart from the advances
under the revolving fund elsewhere in this act provided.’’

HH In spite of the unqualified duty thus imposed by
section 41, subdivision 1, recognized and not limited by other

es

sections or subdivisions, respondents contend that the muni-
cipality is not required to cumulate the assessments for the
reason that in determining the amount of the tax they may
take into account ‘‘any moneys which are or may be’? in the
fund. They assert that the duty of the land owner to pay
his delinquent assessment may be relied upon by the city,
and that the city may legitimately indulge the presumption
that such delinquencies will be eliminated and that the
money will come into the fund. Hence, they say, the legis-
lative body has made an honest determination that a tax
to cover payments to become due, will, together with moneys
which may be in the fund, meet all requirements, including
delinquencies.

‘We are unable to agree that the purpose, language and
effect of the rest of the act can be nullified by an assumption
of this sort. The legislative intention to require levy of a
sufficient tax is unmistakable. A reasonable construction of
the phrase relied upon by respondents must therefore be
that it applies to such moneys as must necessarily be in the
fund, or are, at least, so likely to be there that they may,
for the purpose of exercising the taxing power, be considered
as already in. Perhaps an example would be transfers or
loans from the general fund, or advances from the revolving
fund under section 48. The city, in contemplation of the
availability of such moneys as a result of their transfer being
ordered, may regard them as moneys which ‘‘may be’’ in the
fund, and may take into consideration such specific, definite
sums in computing the tax. There may be other situations
in which specific sums are to be regarded as highly likely
to be in the fund at the necessary time. But this cannot
be said of the unpaid assessments due from taxpayers, which
are neither definite in amount, nor, in the present case,
likely to be collected. The so-called ‘“‘presumption’’ has no
foundation in fact, and is wholly improbable. The very
fact that for some time delinquencies have increased and
past due assessments have accumulated shows that there
is little chance of a substantial amount thereof being paid up
“‘hefore the proceeds of another tax levy’? can be made
available, that is, during the taxable year. All of the
indications are that there will be additional delinquencies
instead of the elimination of past delinquencies,

Ee

The foregoing discussion to the effect that the assessments
must be cumulated is supported by the weight of available
authority from other jurisdictions, as well as by strong ex-
pressions in our own decisions. The Acquisition and Im-
provement Act of 1925 was largely based upon the Road
District Improvement Act of 1907 (Deering’s Gen. Laws,
1931, Act 8276), and the enforcement provisions contain
practically the same language. Section 26 of the latter
statute requires the levy of a special assessment tax ‘‘in
an amount clearly sufficient, together with any moneys
which are or may be in said fund, to pay all the principal
which has become or will become due and all interest which
has become or will become payable on said bonds, before the
proceeds of another tax levy ... can be available’, The
same arrangement is provided for a temporary loan from
the general fund pending the levy and collection of a tax,
and it is similarly declared that ‘‘in any event it shall be
the duty’’ of the taxing authority to levy a sufficient tax.
This statute was before the court in Municipal Imp. Co. v.
Thompson, 201 Cal. 629 [258 Pac. 955], and we held it
valid against constitutional attack. One of the grounds of
invalidity urged in that case was that under section 26
the property owner may not know the amount of the tax to
be paid by him until the final installment on the bonds is
due, ‘‘because the tax on some of the lots in the district
may become delinquent .and some of the land owners be
required to pay an undue proportion in order to make up a
sufficient fund to pay said instalments’. (201 Cal. 636.)

" We said in answer to this objection that it was not essential
to the validity of the statute that the property owner be
advised in advance of the precise amount he will be required
to pay each year, and that the duty to levy and collect
sufficient funds to satisfy installments of principal and
interest as they became due was mandatory. We added
(201 Cal. 637): ‘‘If some of the special assessment pay-
ments become delinquent from year to year it would not
follow that the lands of the delinquent owners would be
relieved from paying the charge. It would be merely post-
poned. With the penalties and costs accruing to the bond
fund it is reasonable to assume that the burden is equalized
during the period that the bonds are outstanding.’”? In
County of San Diego v. Childs, 217 Cal. 109 [17 Pac.

ree

(2d) 784], this court held invalid the Refunding and Re-
assessment Act of 1931, which sought to refund the bonds
of such districts as the one involved herein by substituting
for the ad valorem tax on all the lands a specifie lien on
each parcel of land in the district, and the issuance of a
new bond to represent such lien. In commenting upon the
difference between the two systems, we said of the pro-
visions of the Acquisition and Improvement Act of 1925
under which the bonds had already been issued (217 Cal.
115): ‘The bondholder must look for payment from the
special fund maintained by the annual assessments. If
the fund becomes depleted and is insufficient to pay the
‘interest or principal on the bonds i is the duty of the
board of supervisors to provide for the deficiency in the
subsequent levy.’? (Italics ours.) (See, also, 0. T. Johnson
Corp. v. Los Angeles, 128 Cal. App. 440 [17 Pac. (2d)
792}; Robinson v. Supervisors of Butte County, 48 Cal.
353.)

The majority of the cases from other jurisdictions support
the conclusion that a statutory duty to ‘‘levy and collect’?
taxes is not discharged by their mere levy, but requires
that they be actually collected. These cases likewise declare
that a mandatory duty to cumulate assessments exists in
situations analogous to that presented in these cases. (See
Rountree v. State, 102 Fla. 246 [135 So. 888]; Klemm v.
Davenport, 100 Fla. 627 [129 So. 904, 70 A. L. RB. 156];
Norris v. Montezuma Valley Irr. Dist., 248 Fed. 369; Gates
v. Sweitzer, 847 Ill. 853 [179 N. E. 887, 79 A. L. R. 1151];
In re Dancy Drainage Dist., 190 Wis. 327 [208 N. W. 479].)

We have been asked to consider the hardship which
may result where the land owners who are not in default
are forced to pay an additional tax to meet the deficiency
caused by other defaulting taxpayers; and it has been urged
that to cumulate the levies will result in the building up
of a huge and unnecessary surplus fund in the event that
ultimately the delinquencies are met by money from re-
demption or sales of the property. To each objection it
must be answered that the legislature has expressed its
intention in a manner sufficiently clear, and that this court
is without the power to change the terms of that expressed
intention. The evil complained of is, indeed, inescapable

ee

in any system of ad valorem taxation. (See In re Dancy
Drainage Dist, supra; Burnett v. City of Grand Rapids, 264
Mich. 593 [250 N. W. 320].) But it has been pointed out
that there is good reason to believe that over the period of
thirty years during which the bonds are to be retired, the
temporary inequalities arising from cumulative assessments
will be ironed out and equalized; that is, that by reason of
revenue from redemptions and sales, the future tax levied
will be decreased and the burden on the nondefaulting
owner eased. (See Municipal Imp. Co. v. Thompson, supra.)
As to any surplus money remaining in the fund after the
bonds are retired, the act (sec. 41, subd. 7) provides that
they are to be used for repairing public ways in the dis-
trict, and thus they serve to meet the cost of improvements
which the land owners would otherwise be forced to pay
for by further taxes.

That respondents’ arguments were properly ad-
dvessed to the legislature would appear from the fact that
the act under discussion was repealed in 1933 (Stats. 1933,
chap. 346) ; but the enforcement of the bonds already issued
is not and of course cannot be affected by the repeal.

TM Under the statute as we have interpreted it, the
right to mandamus inevitably follows. The only effective
remedy of unpaid bondholders in a case such as this is a
writ of mandate, and to deny that remedy is practically to
render the obligation unenforceable. (State v. Lakeland,
(Fla.) [150 So. 508, 90 A. L. R. 704]; Rowntree v. State,
supra.)

It is therefore our conclusion that a peremptory writ of
mandate should issue to compel the respondent city council
to levy a special assessment tax upon all the lands in Ac-
quisition and Improvement District No. 1 of the city of
San Diego in an amount clearly sufficient, together with
moneys which in some specific amount are or will neces-
sarily be in the bond fund before another tax levy for
municipal purposes can be made available, to pay all prin-
cipal and interest now due,-and which will become due
before the proceeds of another tax levy made at the time
of the next general tax levy for municipal or county pur-
poses can be made available for such payment; such levy
to be made at the time of the next general tax levy for

be

5 es

county or municipal purposes and for each succeeding year
thereafter.
Tt is so ordered.

Rehearing denied.

Shenk, J., dissented.
be

[S. F. No, 15110. In Bank—April 24, 1934.]

JOINT HIGHWAY DISTRICT No. 13 OF THE STATE
OF CALIFORNIA (a Public Corporation), Petitioner,
v. HENRY L. HINMAN, as Treasurer, etc., Respond-
ent.

Orrick, Palmer & Dahlquist and Archibald B, Tinning
for Petitioner.

Decoto & St. Sure for Respondent.

WASTE, C. J—The petitioner, Joint Highway District
No. 13, hereinafter referred to as the ‘‘District’’, was formed
in 1928 by the concurrent action of the boards of super-
visors of Alameda and Contra Costa Counties, for the pur-
pose of constructing a public highway and tunnel, part of
which is in each of those counties, and generally described
as beginning in the city of Oakland and running thence
northeasterly to, under and through the Contra Costa hills,
and connecting with an existing state highway rumning to
Lafayette and Walnut Creek in Contra Costa County. Re-
spondent is treasurer of the District.

5:2

The District was reorganized under the provisions of the
“Joint Highway District Act’’, as revised and amended
(Stats. 1931, p. 2072), hereinafter generally referred to as
the “‘Act’’. The legislature, in 1933, adopted a general
“Act validating the formation, organization, reorganization
and existence of joint highway districts’, previously organ-
ized. (Stats. 1933, p. 519.)

The reorganized District caused to be prepared, and duly
adopted, plans and specifications for, and made a, final esti-
mate of the cost of, the highway planned to be constructed.
These were submitted to the director of the department of
public works of the state of California, and were duly ap-
proved by him. The final estimate of the cost of construction
is the sum of $3,752,035.44. The public works administration
of the United States has agreed to grant to the District thirty
per cent of the cost of the labor and materials included with-
in the cost of construction, to wit, the sum of $1,073,433.82.

The state of California, through its state highway commis-
sion, has approved the projected construction, and has author-
ized the granting of a contribution of $300,000 by the state
of California toward the proposed work. The board of
directors of the District decided and ordered that serial
bonds be issued in the amount of the remainder of the
estimated cost, or in the sum of $2,378,601.62, for the pur-
pose of providing the funds necessary to finance and com-
plete the construction. Ninety per cent of the cost of the
work, as represented by the bonds, has been allocated by the
directors of the District to be raised and paid by a tax levied
in Alameda County, the remaining ten per cent to be raised
by a like tax in Contra Costa County. The assessed valua-
tion of the real and personal property of Alameda County,
as fixed by the county assessment-rolls for the fiscal year
1933-1934, is $385,625,106, and the like assessed value of
property in Contra Costa County is $82,663,780. Other than
these bonds, ordered to be issued by its board of directors,
the District has no bonded indebtedness, has authorized the
incurrence of no other obligations, and is ready to proceed
with the construction as soon as its bonds are sold.

Petitioner has demanded of the respondent that he sign
the bonds; but respondent, on various grounds, has de-
clined and refused to do so, and none of said bonds have

SS

been executed or delivered. This procecding is to compel
the respondent, as treasurer of the District, to sign the
bonds.

All the acts and proceedings taken for the purpose of
forming, organizing and reorganizing the District were
“legalized, validated and declared to be sufficient for all pur-
poses’’, and the District was declared ‘‘to be duly formed,
organized and reorganized’’, by the terms of the validating
statute, supra. No objection is offered to any of the various
steps leading up to the issuance of the bonds. J The
major contention of the respondent is that the tax method
provided by the act under which the District was formed,
and the tax method adopted by it, are unconstitutional and
amount to a violation of the provisions of both the state and
federal Constitutions. First, it is contended that such
method violates the provisions of section 1 of article XIII of
the state Constitution, in that it fails to provide equal and
uniform taxation throughout the District. The section pro-
vides that all property in the state not exempt shall be
taxed in proportion to its value, to be ascertained by law,
or as in the Constitution provided. The tax, to be valid,
must be equal in its burdens and uniform in its operation.

The Joint Highway District Act provides that the board
of directors of a district shall annually levy a tax within
the district sufficient to meet the principal and interest on
its outstanding revenue bonds—the kind the petitioner pro-
poses to issue. The amount of the tax being fixed by the
board, the treasurer of the district shall thereupon trans-
mit to the board of supervisors of each county in the
district a statement of the total sum to be collected within
each county in the fiscal year on behalf of the district. On
receipt of such statement, it then becomes the duty of the
boards of supervisors to cause the amount to be collected
by a tax upon and from the taxable property in the county.
The tax must be collected in behalf of the district by the
proper county officers in the same time, form and manner
as county taxes. All laws applicable to the levy, collection
and enforcement of county taxes are made applicable to the
collection of the special tax, when not in conflict with any
of the provisions of the act. We find nothing in the provi-
sions of the act conflicting with the provision of the Con-
stitution cited by respondent. [J While the legislature

5S

is expressly prohibited by the Constitution from delegating
to any special commission, private corporation, association
or individual any power to levy taxes, it is authorized to
provide for the supervision, regulation and conduct, in such
manner as it may determine, of the affairs of many forms
of districts organized under the laws of the state. (Const.,
art. XI, sec. 18.) Whenever a special district of the state
requires special legislation therefor, it is competent for the
legislature, by general law, to authorize the organization of
such district into a publie corporation with such powers of
government as it may choose to confer upon it. (In re Ma-
dera Irr. Dist., 92 Cal. 296, 818 [28 Pac. 272, 276, 675, 27
Am. St. Rep. 106, 14 L. R. A. 755]. See, also, Stuckenbruck
v. Board of Supervisors, 193 Cal. 506, 509 [225 Pac. 857].)
HE Neither does it matter that the incorporated cities situ-
ated in Alameda and Contra Costa Counties are included
within the boundaries of the Joint Highway District. The
cities may be as much benefited as the other sections of the
counties, and should bear their proportion of the burden
of the cost of the improvement. (In re Madera Irr. Dist.,
supra, at p. 843.) The legislature has provided for the for-
mation of a recognized legal kind of taxing district. Its dis-
erection in doing so may not be questioned. It has provided
a well-recognized, efficient and tried method and procedure
for the levy and collection of the tax for which the District
was formed.

HE Respondent does not claim that any express prohibi-
tion against the scheme provided in the act is found in the
Constitution; but he does contend that such provisions im-
pliedly prohibit any proceeding other than one by which
the levy is spread over the entire District at a uniform rate.
This objection goes to the allocation of ninety per cent of
the cost of the work to Alameda County and ten per cent
to Contra Costa County. According to the assessed value
of property in the two counties, it appears that the ad
valorem tax levy necessary to raise the tax will not be the
same in each county. This situation does not render the tax
lacking in uniformity. In 1 Cooley on Taxation (4th ed.),
see, 822, p. 678, the rule on this subject is thus stated: ‘‘In
case of a public improvement, where the legislature is of
the opinion that only a part of a county is specially inter-
ested in the improvement, and that of the part thus inter-

eel

ested some localities would be more benefited than others it
may limit the tax to pay for such improvement to the terri-
tory deemed to be specially interested, and may apportion
the tax among the different districts within the territory
in accordance with their respective interests in the improve-
ment, without violating the constitutional requirement of
equality and uniformity....As has been clearly stated,
‘different taxing districts, for the same general purpose,
may be thus created where there are peculiar reasons why
one part of the public should bear a proportion of the
burden greater than tliat which should be borne by another,
and a greater rate of taxation be imposed on some districts
than others.’’? The decided cases support the rule. In
Foster v. Pryor, 189 U. 8. 825 [23 Sup. Ct. 549, 47 L. Ed.
835], the Supreme Court of the United States held that in
the case before it the legislative act providing for a differ-
ence in taxation amounted, in itself, to a provision for a
different taxing district within the principles just stated,
and that no one would say that it was not a most reason-
able and just recognition of a plain difference in circum-
stances, which ought to lead to a difference in the propor-
tion of taxation between the two places involved. In Gilson
v. Board of Commrs., 128 Ind. 65 [27 N. EB. 235, 11 L. R. A.
835], the court was considering a statute providing for the
acquisition by townships of toll roads. The cost was to be
divided between the townships in proportion to the assessed
. value of the toll road purchased in each of the townships.
Lafayetie, M. & B. Railroad Co. v. Geiger, 84 Ind. 185,
related to the levy and collection of a tax in aid of the
construction of a railroad. It was contended that, inasmuch
as the railroad ran through several counties, it was neces-
sary that each and all of the counties must vote for an
appropriation, and assess the same amount of tax in each
county, to make it uniform and equal. In each of these
Indiana cases the court held that if the tax assessed was
equal and uniform in the county where assessed, it would
not violate the requirements of the Constitution as to uni-
formity in taxation. To the same effect, see Nettles v. Cant-
well, 112 8. ©. 24 [99 8. EB. 765].
HE We are of the view that the Joint Highway District
Act does not violate the due process provision of the federal
Constitution in providing for the organization of the Dis-

a

trict and the method of levying and collecting the tax. The
legislature had full power over the subject matter of the
formation of the District. It delegated this power to the
boards of supervisors of the respective counties comprising
the District. The construction of the proposed highway
is a matter in which the whole community has an interest,
and is a typical public purpose for which property may be
taxed by the state. Questions relating to spreading the tax
are matters which rest in the discretion of the state, and
are not controlled by either the due process or the equal
protection clause of the fourteenth amendment. (Memphis
etc. Ry. Co. v. Pace, 282 U. S. 241 [51 Sup. Ct. 108, 75
L, Ed. 315, 72 A. L. R. 1096].) If the tax can at any time
be shown to be palpably arbitrary, thereby amounting to a
clear abuse of power, it will fall under the condemnation
of the due process clause. Where the difference between
the different portions of territory is plain and palpable, the
right of the legislature to recognize that difference and to
provide for a difference in taxation cannot be denied with-
out imposing restraints upon the constitutional power of the
legislature, which cannot in reason be justified. Whether
there is such a difference would generally be for the legis-
lature to determine, although it cannot be said that the
courts could not, in any possible state of facts, review that
determination. (Foster v. Pryor, supra, at p. 334.)

As to notice being required to be given to the tax-
payers of the District upon its formation, the legislature
expressly validated the creation of all highway districts
which had functioned more than six months prior to the
taking effect of the validiating act [petitioner being one of
them], which had the effect of legislatively creating said
District, and thereby obviated the necessity of notice or
opportunity to be heard.

The tax levy provided by section 22 of the act to be
imposed upon the property within the District for the pay-
ment of the principal and interest of the bonds is a tax,
and not an assessment for benefits, and is imposed upon
both real and personal property. Therefore the act does
not violate the due process clause of either the federal or
state Constitution providing for notice and opportunity to
be heard on benefits. For the same reason, the ‘‘Special
Assessment, Investigation, Limitation and Majority Protest

SS

Act of 1931” (Stats. 1931, p. 18372) has no application to
the tax levy here in question. (Anaheim Sugar Co. v.
County of Orange, 181 Cal. 212 [183 Pac. 809].)

Hl The provision of section 19 of the act, requiring the
payment of one-fifth of the total amount levied by the
District within ninety days after the adoption of the resolu-
tion for levy by the board of supervisors, relates to the
financing of a project without the issuance of bonds, and
is therefore not a condition essential to the validity of a
proposed bond issue under the alternate plan provided by
the act.

‘We do not share the view advanced by respondent
that the only provision in the act for a tax is the one found
in section 22, which provides for a tax to satisfy merely the
obligation created by the proposed bond issue. The power
given the board of directors to tax is the power to create a
general obligation. All the taxing provisions of the act
read together, we are satisfied, give to the board of directors
full power to provide for unpaid installments of the tax
levied, or anticipated delinquencies in any levy about to be
made.

HH It is contended by the respondent that the proposed
bond issue and the enabling portions of the Joint Highway
District Act, supra, violate the provisions of section 18 of
article XI of the state Constitution prohibiting certain
enumerated political subdivisions of the state from incurring
any indebtedness or liability in any manner, or for any pur-
pose, exceeding in any year the income and revenue provided
in such year, without the assent of two-thirds of the quali-
fied electors thereof voting at an election. The provision
has no application to the petitioner. The prohibition in
the Constitution is limited to the public corporations enu-
merated in the section, and under familiar rules of con-
struction cannot be extended to any others. (In re Madera
Irr. Dist., 92 Cal. 296, 342 [28 Pac. 675, 27 Am. St. Rep.
106, 14 L. R. A. 755]; Sharp v. Joint Highway District
No. 6, 111 Cal. App. 81, 84 [295 Pac. 841], answering this
identical contention. See, also, Hast Bay M. U. Dist. v.
Railroad Com., 194 Cal. 608, 617, 618 [229 Pac. 949].) The
ponds here in question are not county bonds, but are obliga-
tions of the District.

558

HM A further contention of respondent is that the
“Joint Highway District Act’’ is violative of section 12 of
article XT of the state Constitution which declares that ‘‘the
legislature shall have no power to impose taxes upon coun-
ties, cities, towns or other public or municipal corporations,
or upon the inhabitants or property thereof, for county,
city, town or other municipal purposes, but may, by general
laws, vest in the corporate authorities thereof the power to
assess and collect taxes for such purposes’. The section
has no application to this case. The act does not grant or
delegate to any commission, private corporation, or indi-
vidual power to make, control, appropriate, supervise or
interfere with any improvement, money or property of any
of the cities within the boundaries of the District, nor does
it give to the boards of supervisors of the counties of Ala-
meda and Contra Costa, or either of said boards, or to the
directors of the Joint Highway District, any power to trench
upon any of the things mentioned in section 13 of article XI
of the Constitution relating to municipal affairs. (Peterson
v. Board of Supervisors, 65 Cal. App. 670 [225 Pac. 28].)
HH The collection of the tax in this case is for a state
purpose—the development of the highway system of the
state—and the legislature has the power to provide for
such taxation by appointive boards in such districts.
(Golden Gate Bridge etc. Dist. v. Felt, 214 Cal. 308, 321
et seq. [5 Pac. (2d) 585].) The prior decisions of this
court dnd other authorities supporting such holding are
collected and analyzed in that decision.

A minor objection urged against the bonds by
respondent remains to be considered. Of the two alternate
plans provided in the act for paying the cost of the work,
the board of directors of the District elected to finance the
project by the issuance of what are denominated in the act
“revenue bonds’’. These bonds are not true revenue bonds,
payable exclusively out of the proceeds of the completed
improvement, but are to be paid (principal and interest)
by an ad valorem tax levied annually by the board of di-
rectors of the District upon all the real and personal prop-
erty within the District. To designate such bonds ‘‘revenue
bonds’? would tend to mislead. The form of the bonds, set
forth in section 21 of the ‘act, includes the caption ‘“‘Revenue
Bonds”’. This caption was omitted from the printed bonds,

Ce 589

which are captioned “‘Joint Highway District No. 18 Bond
Fund”. The bonds are only required to be “‘substantially’’
in the form set out in the act. For both reasons, we deem
the omission immaterial. J On another ground, we
reach the same conclusion. The act, in sections 27 and 39,
declares that no error, defect, irregularity or informality
which does not affect the jurisdiction of the board of di-
rectors of the District shall render void or invalidate any
bonds issued under its terms.

Let a writ of mandate issue commanding the respondent
to forthwith sign the bonds in question.

Curtis, J., Thompson, J., Shenk, J., Langdon, J., Preston,
J., and Seawell, J., concurred.
a
(Crim, No. 3716, In Bank—April 25, 1934]

THE PEOPLE, Respondent, v. HARRY A. HANSON,
Appellant.

Robert E. Crowley and Gerard Remington for Appellant.

U. S. Webb, Attorney-General, and Lionel Browne,
Deputy Attorney-General, for Respondent.

590 es 7

SEAWELL, J.—Defendants were charged with the crime
of assault with a deadly weapon. The jury returned a
verdict against defendant Hanson of guilty of the offense
charged, and against defendant Tillotson, a verdict of guilty
of simple assault. Defendant Hanson appeals from the
resulting judgment of conviction and from the order deny-
ing his motion for a new trial, contending that the record
establishes no more than simple assault.

The evidence shows that on the morning of January 3,
1933, defendants, who were driving home in their car,
stopped in the rear of a Safeway store in the city of Los
Angeles, whereupon defendant Hanson got out, took a box
of tomatoes from the platform, and put it in the car. Police
officer Joseph E. Daniels then appeared and placed Hanson
under arrest, took him to the car, and, holding his gun in
his right hand, attempted to handeuff Hanson to Tillotson.
Hanson snatched the officer’s gun, called for Tillotson to
help, and the three engaged in a struggle during which the
gun was discharged, the bullet striking the officer’s hand.
Defendants succeeded in throwing the officer to the ground
and escaped. They were apprehended several weeks later.

HE Appellant, as already stated, claims that the evi-
dence establishes only a simple assault. The testimony of
Officer Daniels shows that he was struck with the handcuffs,
and narrowly escaped death from the gun. He said: ‘‘The
struggle took place between Mr. Hanson, Mr. Tillotson and
myself, and the gun was completely away from me before
it ever went off.’’? He also testified: ‘‘I was trying to
keep the gun from going off while it was pointed at my
head—was pushing it away.’’ As he pushed it aside, the
gun was discharged, with the result stated. One of the
defendants then struck the officer on the jaw, knocking him
down.

Appellant seeks to transform this vicious attack on an
officer of the law, which, by reason of his desperate defense,
fell short of murder, into a misdemeanor of the character
of a street brawl. He says that he did not intend to shoot
the officer. The jury was fully justified in inferring an
unlawful intent from the fact that he seized the gun, and
that it was discharged when pointed at the officer. People

SS

v. Wells, 145 Cal. 188 [78 Pac. 470], amply supports the
judgment.

Police officers daily risk their lives in the protection of
lives and property of the public. Their duties are suffi-
ciently hazardous without adding to their danger by condon-
ing conduct such as that of the defendant. A deadly assault
on an officer should meet with swift and severe punishment,
and this the jury has meted out to appellant. Less than
this would amount to an invitation to other dangerous crim-
inals to hold the life of a police officer as cheaply as defend-
ant has held it.

The judgment and order are affirmed.

Thompson, J., Langdon, J., Curtis, J., Preston, J., Shenk,
J., and Waste, C. J., concurred.

Rehearing denied.
a

[S. FP. Nos. 15052-15053. In Bank.—April 26, 1934.]

JOHN D. McNEIU, Respondent, v. EAST BAY STREET
RAILWAYS, LTD. (a Corporation), et al., Defend-
ants; THE WESTERN PACIFIC RAILROAD COM-
PANY (a Corporation) et al., Appellants.

©. W. Dooling and Brown, Ledwich & Rosson for Appel-
lant Western Pacific Railroad Company.

Brobeck, Phleger & Harrison and Chapman, Trefethen,
Richards & Chapman for Appellant Key System Transit
Company.

Myron Harris, Leo A. Sullivan, William H. Older and
John Jewett Earle for Respondent.

THE COURT.—A hearing was granted in this case to
enable us to consider more at length the points made on
the respective appeals. After such re-examination we are
satisfied with the conclusions reached by the District Court

Cg

of Appeal and adopt the opinion prepared by Mr. Justice
Sturtevant of the First District, Division Two, as the opinion
of this court. It is as follows:

‘While riding as a passenger on a street car operated
by the defendant Key System Transit Company, hereinafter
called ‘Transit Company’, the plaintiff was injured when
the car was struck by the engine of the train operated by
the Western Pacific Railroad Company, hereinafter called
‘Railroad Company’. He sued for damages. He named as
defendants both companies and their trainmen who were in
charge. The jury returned a verdict in the sum of $35,761
and costs in the sum of $651.68. The defendants have ap-
pealed and have brought up one transcript but two sets of
briefs.

“Appeal by Western Pacific Railroad Company and its
agents.

“The accident occurred at the intersection of Twenty-
third avenue and East Twelfth street, which intersect each
other at approximately right angles, in the city of Oakland,
at about 7:25 or 7:30 a. m. (daylight) on May 12, 1930.
Twenty-third avenue runs in a general northerly and south-
erly direction and Hast Twelfth street in a general easterly
and westerly direction. The Transit Company operated its
street cars from Oakland to Alameda and vice versa, on a
set of double tracks on Twenty-third avenue which crossed
East Twelfth street. The easterly set of said street car
tracks was used for Oakland, or northbound traffic, and
the westerly set for Alameda, or southbound traffic.
Twenty-third avenue was approximately 38 feet wide from
curb to curb. These street car tracks were laid approxi-
mately in the center of Twenty-third avenue, were cach of
standard gauge width, namely 4 feet 7 inches, were 6 feet
3 inches apart, and the most easterly rail of the easterly
set of tracks was approximately 12 feet westerly of the
easterly curb of Twenty-third avenue and approximately
211% feet westerly of the easterly property line of Twenty-
third avenue.

“Defendant Railroad Company operated both freight and
passenger trains, with steam as the motive power, in an
easterly and westerly direction on a single set of standard
gauge railroad tracks on Hast Twelfth street, said railroad
tracks being a part of its main line of railroad from Oak-

a

5,

land to Salt Lake City. The railroad tracks were not laid
in the center of East Twelfth street, but to the south
thereof, the southerly rail thereof being 16.60 feet north
of the southerly curb of Hast Twelfth street, and the
northerly rail being 30.65 feet south of the northerly curb
of East Twelfth street.

“The street’ car involved in the collision out of which
this case grows was northbound on Twenty-third avenue,
proceeding on the easterly set of tracks from Alameda
toward Oakland, and was operated by defendant C. R. Jones,
an extra man, who was acting as motorman and conductor.
Tle was discharged immediately after the accident. The
train was a regular passenger train from Salt Lake City,
westbound on Fast Twelfth street to the Oakland Mole, and
consisted of an engine, tender and ten cars.

“‘At the time of the accident, and for some months prior
thereto, there was in operation at the intersection of Twenty-
third avenue and East Twelfth street a system of traffic
signals installed by the city of Oakland to control vehicular
and pedestrian traffic in all directions at the intersection.
These traffic signals were lights operated in conjunction with
bells, there being such a signal located at each of the four
corners of the intersection. The signal on the north side
of East Twelfth street immediately west of the property
line of Twenty-third avenue showed its signal to westbound
traffic on East Twelfth street (the direction in which the
train was proceeding). The signal on the northeast corner
showed its signal for northbound traffic on Twenty-third
avenue (the direction in which the street car was proceed-
ing). Each traffic lantern had a red, amber and green
light in it, the red signaling for traffic to stop, the amber
that pedestrians might proceed, and the green that all traffic
might proceed. The traffic lights were synchronized to the
extent that while the amber and green were showing at the
northeast corner for northbound traffic on Twenty-third
avenue, a red light would be showing for east and west-
bound traffic on East Twelfth street and vice versa. The
green light for traffic on Twenty-third avenue showed for
twelve seconds, during which time and for four additional
seconds, while the amber preceding this green was showing,
a red light would show for traffic on East Twelfth street,
making a total showing of the red light for traffic on Hast

595

Twelfth street of sixteen seconds in all, provided no train
passed over the contact point (hereinafter described) during
said sixteen seconds. The normal period for the red signal
for traffic on Twenty-third avenue was twenty-nine and a
half seconds, during which time the amber showed three
and one-half seconds for traffic on East Twelfth street and
the green twenty-six seconds for traffic on Hast Twelfth
street. :

“After the traffic signals were installed, an additional
device, operated by trains on said railroad track, was added
thereto, so that when the pony, or front, wheels of an engine
of a west bound train reached a point on said railroad
tracks two hundred and twenty feet east of the most easterly
rail of the street car tracks, the train was given control
over all traffic signals at the intersection. At this point,
two hundred and twenty feet distant as aforesaid, there
was installed on the railroad tracks a contact point, or in-
sulated joint, frequently referred to in the testimony as a
‘tripper’ which operated on these traffic signals so that when
the pony wheels of the engine passed over the railroad
tracks at this point, this contact caused the traffic signals
at the intersection to instantly show a green light, or pro-
ceed signal, to the engineer on the train and for all east
and westbound traffic on East Twelfth street, and at the
same time caused the traffic signals for Twenty-third avenue
traffic to instantly show a red light, or stop signal, for all
traffic on Twenty-third avenue, regardless of what the
signals were prior thereto, and also caused all bells in the
light signals to start ringing. The only delay that could
oceur would be by the operation of the insulated joint,
which took only a fraction of a second to operate. Under
the signal system, the light remained green for the train
and red for Twenty-third avenue traffic, and all bells in
the traffic signals rang until the rear wheels of the last car
of the train crossed the intersection. In other words, in
addition to any other warning given by the train to north
and southbound traffie on Twenty-third avenue, when the
pony wheels of the engine reached this insulated joint the
traffic signals turned red for Twenty-third avenue traffic
and the bells therein began to ring. The obvious purpose
of this signaling system was to give the train the right of

ae

way over all traffic at the intersection, and to give warning
of its approach.

“Prior to the installation and location of this contact
point, a field inspection was made by the engineers of the
railroad commission, the electrical and police departments
of the city of Oakland, and the Western Pacifie Railroad
Company, and its location fixed after such field inspection.
After its installation, another field inspection was made to
see how the signals operated, and the location and installa-
tion of the contact point and its control over the traffic
signals at Twenty-third avenue was approved by the rail-
road commission and the city of Oakland several months
prior to this accident.

“The aforesaid distance of 220 feet was fixed so that a
train could stop, if necessary, between the contact point and
Twenty-third avenue, and it was decided that this was a
safe distance for traffic on Twenty-third avenue to clear
the railroad tracks. A maximum speed of fifteen miles an
hour for trains betweeri this contact point and the street
car tracks was determined upon at the time of installation.

“The street car stopped south of the east curb of Twenty-
third avenue, or in the normal place for it to stop. Hsti-
mates of the witnesses of the distance that the front of the
street car stopped from the nearest rail of the railroad
tracks varied from about 20 feet, fixed by the fireman, to
30 to 85 feet fixed by the motorman and other witnesses.
The street car remained stopped at this place from some-
thing over half a minute to a minute. It was about a
minute ahead of time during which time the motorman
waited until it was time for him to start. The signal for
Twenty-third avenue traffic was green for the street car
while it was stopped, but, being about a minute ahead of
time, the motorman waited until the signal again turned
to green (the time from one green signal to another for him
was twenty-nine and one-half seconds). He then proceeded
‘very slowly’, and estimated his speed from the time he
started until he saw the train as ‘something like two miles
an hour’.

“Defendant A. W. Fuller, who was the locomotive fire-
man, was riding in the cab on the left side of the engine.
THis deposition was taken and read in evidence. He testi-
fied on his deposition that when he was about 200 or 250

SS

feet east of the easterly rail of the street car tracks, he
first saw the street car, standing still, slightly back of the
curb line on East Twelfth street—three or four feet. At
that time, he could see about two-thirds of the intersection
from the southerly curb toward the north. At that time
there was ‘plenty of traffic on Hast Twelfth street’, and
from that time until the time of the collision there was no
northbound or southbound traffie on Twenty-third avenue,
either pedestrian or vehicular. After seeing the street car
stopped, as aforesaid, the fireman did not continue to ob-
serve it at all times, but looked directly ahead, watching
for automobile traffic, and he next saw the street car ‘just
after it started to move’. He estimated the front of the
engine was then about 75 to 100 feet east of the square
formed by the crossing of the railroad tracks and the street
car tracks, and that the street car had then moved about
four feet, or was about even with the southerly curb line
of Hast Twelfth street, and was just barely in motion. He
continued to observe the street car from that time until it
was hit by the locomotive. He could also see the motorman
who did not look toward the fireman up to the time of
the collision. His best judgment was that the street car
did not average more than three or four miles per hour
from the time he first saw it moving until the collision.
When he noticed the street car moving into his line of
travel and that the motorman was not looking in the diree-
tion of the approaching train, he immediately called to the
engineer to ‘plug her’, and the instant he did so the emer-
gency brakes were applied.

“The fireman stated in his deposition that when he first
saw the street car moving, he waited ‘for a little time’
“before he called to the engineer to ‘plug her’. On his
deposition, he also testified that after he noticed the street
ear moving, he noticed the motorman: in ‘a matter of a
second’, and as soon as he observed that the motorman was
not looking, he hollered to the engineer ‘plug her’. He
estimated that from the time he first saw the street car mov-
ing until he called ‘plug her’, the train traveled ‘probably
25 feet or less’. Although the fireman knew the street car
was moving, he did not believe it was going to cross the
track in front of the train,

08

“On the trial the fireman estimated that the street car
traveled from four to six feet during the second’s time that
he observed the motorman looking away from the train be-
fore he called to the engineer to ‘plug her’; but he also
testified on the trial: ‘How far the car traveled is just guess
work on my part.’ He also testified on the trial that the
best he could fix the location of the front of the strect car
when he called to the engineer to ‘plug her’ was that it was
somewhere between the curb and a distance of from four to
six feet from the railroad tracks. He stressed that it was
almost impossible for him to do other than guess at dis-
tances, and in this connection gave this answer: ‘It is
almost impossible to measure distance sitting in the cab of
a locomotive going along a street that is full of traffie which
is liable to come in contact with the train at any time.’
He also testified on the trial that from the time he observed
the motorman until he called to the engineer to ‘plug her’
was like the time that it takes for the snapping of fingers,
saying in this regard: ‘The little time that I noticed the
motorman was not looking was like that (snapping fingers).
I never came to the conclusion that he was going to cross
the track.’

“‘Altogether the engineer immediately applied the emer-
geney brakes upon receiving the call from the fireman to
‘plug her’; it was then impossible to stop the train before
the engine reached the street car tracks; so the engine struck
the street car approximately in the middle thereof and
shoved the rear end of it off its track a distance of some-
where between 25 and 35 feet.

“From the time the emergency brakes were applicd, the
train traveled 80 or 85 feet, which was a ‘very good stop’
for a train going 12 miles an hour. .

“The street car was 4544 feet long, not including
the fender. The fireman estimated the time that the street
car was standing still from the time he first saw it until he
saw it moving as about seven seconds, The street car at
no time increased its speed.

“These defendants claim they were not negligent. We
think there is no evidence that they were. It is not claimed
that there was any act of negligence unless the engineer
or the fireman was negligent. As to the engineer it is clear
that he was at his post of duty and duly attentive. There

eee

is not a particle of evidence that any stop signal or sign
of danger was seen or could have been seen by him, or
that he could have seen the street car. As to the fireman
he was at his post of duty and duly attentive. It is true
he saw the street.car and saw its movements. Considering
all of the facts as recited above, nothing shows or tends to
show that he was negligent. He was not called upon to
stop the train nor to notify the engineer until he became
aware that the street car was actually going to attempt to
eross the track in front of the oncoming train. When the
fireman was exercising due care regarding the agency which
he was helping to operate he had the right to assume that
the motorman in charge of the street car would exercise
due care and would not actually attempt to cross the track.
(Young v. Southern Pac. Co., 189 Cal. 746, 754 [210 Pac.
259]; Green v. Los Angeles etc. Ry. Co., 143 Cal. 31 [76
Pae. 719, 101 Am. St. Rep. 68].) When, thereafter, he
came to a realization that the motorman was going to make
said attempt the fireman acted promptly. But it was then
too late. Be that as it may, such facts do not show negli-
gence on the part of any one of these defendants.

By reason of our conclusions on the point just discussed.
it is unnecessary to discuss other points presented by these
defendants.

“Appeal by the Key System Transit Company.

HI ‘This defendant contends it was not negligent. It
called C. R. Jones who was acting as motorman of the
defendant’s car at the time of the accident. He testified
that shortly prior to the accident he had come to a stop on
the south side of the steam railroad track. He was ahead
of time and paused for a short time. He was operating a
one-man’s car and the front door was standing open. He
was seated and was looking up the track in the direction
from which the train later appeared. He saw no train and
he heard no bell or whistle. When it was time to go he
waited for the corner automatic signal. When it showed
green he closed the door, started to move forward, and
turned his head to the left and continued looking in that
direction because high buildings on that side narrowed the
seope of his vision. With his eyes turned to the left he
continued to advance until he was on the track. He then
looked to his right. The train was nearly on top of him.

00

He advanced the spark and attempted to speed across.
The uncontradicted facts are that from the point where
his car was when the motorman was looking’ east up the
track of the Western Pacifie, the track is visible for 730
feet and that the whistle was blown just before the train
came on to East Twelfth street—two blocks distant. There-
after, the automatic bell on the engine was ringing continu-
ously. After the engine crossed ‘the tripper’ the bells in
the automatic street signals rang continuously. For .the
safety of the plaintiff (a passenger in his car) the motor-
man was bound to exercise the utmost care. We cannot say
the evidence showed that he did so.

“Tt is also claimed that the cause of the accident was
the negligence of the Western Pacific Railroad Company.
In view of what we have stated above it is not necessary
to dwell further on that claim.

| | “Finally, it is claimed that the damages are exces-
sive. The point is presented under three headings. It is
said ‘that when viewed in the light of similar cases involy-
ing equally serious injurics, the earning power of money,
and the tremendously increased purchasing power of money,
the damages are so excessive as to necessitate the conclusion
that they were the result of passion or prejudice on the
part of the jury’. That this court should consider the rul-
ings in similar cases involving equally serious injuries has
been held. (Macde v. Oakland High School Dist., 212 Cal.
419, 425 [298 Pac. 987].) No doubt it should also con-
sider the earning power of money and its increased pur-
chasing power. [J But when we come to apply said rules
to this case we are stopped by the facts developed at the
irial. The accident occurred May 12, 1930. The plaintift’s
back was broken. He was taken to a hospital. A cast was
placed on his body extending from the nipple line to the
knee on the left side and to the groin on the right side.
The plaintiff was compelled to lie on his back from eight
to ten weeks. The bones did not knit. When the cast
was removed it was replaced by a steel spinal brace which
he was wearing at the time of the trial and without which °
he could not walk at that time. The break of the vertebra
lighted up a chronic arthritic condition which had been
dormant and painless. Attendant consequences included a
sacroiliac slip, inflammation of the sciatic nerve, and an

, | 601

enlargement on one leg. The plaintiff testified that from
the date of the accident to the date of the trial he suf-
fered excruciating pain, that he suffered insomnia, was be-
coming neurotic, and that since the accident he had not
had anything like a good sound night’s sleep. Special dam-
ages in the sum of $4,000 were proved. The trial was held
nineteen months after the accident. It thus appears that
the evidence before the jury was such that it was within
its rights in making a most substantial award. The defend-
ant argues that if this verdict is not excessive then if it had
been rendered in 1927 the amount should have been $61,000
and more. Perhaps so. On the other hand the plaintiff
may argue that if it had been rendered in 1911 it would
not have been excessive (Zibbell v. Southern Pac. Co., 160
Cal. 237 [116 Pac. 513]), and that it is not now. We think
we are, not entitled to say the verdict, under the facts as
shown by the evidence, was excessive.’’

The judgment as to the defendants, Western Pacific Rail-
road Company, a corporation, H. L. Davis, and A. W.
Fuller, is reversed. The judgment against the defendant,
Key System Transit Company, a corporation, is affirmed.

Rehearing denied.
Le

[Orim. No. 3636. In Bank.—April 26, 1934.]
TITE PEOPLE, Respondent, v. H. K. FUEMING, Appellant.

xt : |
S
S

Clare Woolwine, John S. Cooper, Cooper & Collings and
Harold W. Judson for Appellant.

U. S. Webb, Attorney-General, John L. Flynn, Deputy
Attorney-General, Buron Fitts, District Attorney, and
Frank Stafford, Deputy District Attorney, for Respondent.

THE COURT.—Upon consideration of this appeal, we
hereby adopt as the opinion of this court herein, the follow-
ing opinion heretofore prepared by Mr. Presiding Justice
Conrey for the honorable District Court of Appeal, Second
Appellate District, Division One:

“Appellant, with two others, was brought to trial before
the court, without a jury, on several charges of grand theft,
as stated in counts one, three, four and five of the indict-
ment. At the trial the action was dismissed as to the co-

604 a —

defendants Philips and Glanz, and count five was dismissed.
Defendant Fleming was found guilty on counts one, three
and four. He appeals from the judgment, and from an
order denying his motion for a new trial.

“Tn the first count of the indictment it was alleged that
on or about April 1, 1930, the defendants and each of them
did unlawfully take certain personal property of John L.
Brandt, being two $1,000 bonds issued by the kingdom of
the Serbs, Croats and Slovenes. In the third count it was
alleged that on or about May 2, 1980, the defendants did”
unlawfully take away ten shares of the capital stock of the
Chrysler Motor Car Company, of the value of $591.25, the
personal property of G. G. Stewart. In the fourth count it
was alleged that on or about May 3, 1930, the defendants
did unlawfully take away ten shares of Chrysler Motor Car
Company, of the value of $500, the personal property of
Mrs. M. A. Stewart.

“‘The evidence shows that the crimes charged, if they
were committed at all, were committed by embezzlement.
E. K. Fleming & Co. was a corporation authorized to transact
business as a broker in this state. Stock & Bond Guarantee
Co. was a corporation authorized to transact business as a
broker in this state. Defendant Fleming was the president
and actively engaged in the management of E. K. Fleming
& Co., which company at the time of these transactions was
the principal owner and in control of the Stock & Bond
Guarantee Co. Fleming also occupied a like position in
relation to this latter company. The several transactions
out of which these embezzlement charges grew took the form
of purchases of corporation stocks, or agreements for such
purchases, from or by agency of one or the other of these
brokers and their several customers,—Brandt in the first
count, G. G. Stewart in the third count and Mrs. M. A.
Stewart in the fourth count; and subsequent sales (or sup-
posed sales) of shares of stock by, or through the agency of,
said brokers or one of them, for account of their said cus-
tomer Brandt.

“‘The several grounds of appeal upon which defendant
relies are, that on each count the evidence is insufficient to
sustain the decision; that the court erred in admitting in
evidence certain books and other documents; that the court
erred in overruling defendants’ objections to certain in-

— 605

competent and hearsay evidence; that the court erred in
denying defendants’ motion for a new trial. The principal
questions of law presented by counsel herein relate to the
obligations of a broker arising from the deposit of securities
in marginal transactions, and to the personal criminal liabil-
ity of an officer of a corporation for misappropriation of
property delivered to the corporation.

“First count. (Brandt case.) It is contended that the
evidence is insufficient to sustain the decision. On or about
March 28, 1930, John L. Brandt called at the office of Stock
& Bond Guarantee Company, and there met Jack Williams,
sales manager, who represented the company in the ensuing
transaction. Brandt delivered to Williams, for the company,
a check for $100 to apply on the purchase of certain stocks,
and signed two contracts, numbered 3388 and 3389. These
contracts were admitted in evidence (Rep. Tr., pp. 18 and
628), and are before the court. They are agreements signed
by Brandt, on printed forms of the Stock & Bond Guarantee
Company, showing sales by the company to Brandt, of de-
seribed shares of stock, and the payment by him of certain
small amounts on account of the purchase price. It is in
evidence that it was orally agreed between the company
(by Williams) and Brandt, that the bonds delivered by
Brandt to Williams for the company were to be used as col-
lateral but were not to be sold. It is appellant’s contention
that these were merely marginal sales in which the company
was Brandt’s broker; that is to say, that the broker was to
buy for Brandt, and pay for, the shares of stock; that
thereby the broker would lend to Brandt that portion of
the purchase price not covered by Brandt’s cash payment.
As security for this loan the broker would hold, as collateral,
the purchased shares, together with the bonds received from
Brandt. Taking this as the effect of the contracts as a
whole, we have the further fact on April 1, 1930, Brandt
ordered additional stock purchases, gave a check for $200,
and deposited the two bonds described in the indictment
herein. Brandt testified (Rep. Tr., p. 19) concerning this
transaction, as follows: ‘I told him I didn’t wish to have
those bonds sold; I wanted them for further protection to
the purchase. ... He said that would be all right; he
would see they would not be sold. Q. Did you say anything
to Williams, that you would furnish any additional margin,

606 a —

in case it was called on the purchase of this additional
stock? A. I think that question was discussed, and I told
him that, if necessary, I could supply additional.’

“Nevertheless, the evidence is that on the same day when
the bonds were delivered by Brandt to Williams, that is, on
April 1, 1930, the Stock & Bond Guarantee Company, by
Fleming as its president, borrowed $1,200 from Western
National Bank, and used these bonds as security therefor;
also, that the borrowed money was credited to the general
account of the Stock & Bond Guarantee Company in the
bank, Some weeks later, a receiver of the Stock & Bond
Guarantee Company was appointed. Brandt then made in-
quiries, and for the first time was informed that the bonds
had been used as above stated. Then, finding no other way
to recover the bonds, he redeemed them at the bank by pay-
ing the amount of the loan. It further appears that the
stocks which had been purchased on Brandt’s order had been
‘sold’, or at least reported to him as sold, as directed by
him, and that the transactions showed a profit. There had
been only one call on him for further payment or security,
after April 1st, and he had complied with that demand.
Before any receiver had been appointed, Brandt’s indebted-
ness to the broker had been paid, and Brandt was entitled
to have the Serb bonds returned to him.

“On the facts, which in substance were as above stated,
the question is presented: Was there an embezzlement of the
Serb bonds by the Stock & Bond Guarantee Company, and
by appellant as its acting officer in the loan transaction at
the Western National Bank?

“It is contended by appellant that under the facts of this
ease there could be no embezzlement. The theory as stated,
in substance, is that when the broker executes an order, in a
marginal transaction, he is the customer’s agent, buying
from or selling to a third party; and that when he provides
funds to complete the order and to carry the securities pur-
chased, he deals with his customer as a principal, advancing
his own money and retaining the customer’s property as
security, with all the rights and obligations which attach
to an ordinary loan of money on the security of personal
property. The precise point is that in order to embezzle,
one must be a fiduciary agent, and that in the course of
business of a broker for a customer in a marginal trans-

Pe Ce 607

action the broker holds the customer’s securities as a creditor
holding property in pledge, and not as an agent of the
customer. Counsel points to the following statement by
Meyer on ‘The Law of Stockholders and Stock Exchanges’
(p. 831), where the writer said: ‘The broker has the right,
as a matter of law, to rehypothecate his customer’s securities
for an amount not in excess of the customer’s indebtedness
against such securities. This right exists with respect to
securities which the broker has purchased for the customer
on margin, as well as with respect to securities which are
initially deposited by the customer as margin.’ Criminal
cases are cited which seem to apply the stated rule to prose-
eutions for embezzlement. Among these are Buddeke v.
State, 31 Ohio Cir. Ct. 529; State v. Peck, 299 Mo. 454,
[253 8. W. 1019].

“The general rule is that as between a pledgee and
his pledgor, the pledgee’s application of pledged bonds to
his own separate use in excess of his rights as pledgee is an -
illegal conversion of the property. When there has been
such conversion and the pledgce has failed to comply with
demand made upon him for return of the bonds after pay-
ment of the pledgor’s debt, ‘there can be no doubt that
from that moment there existed a wrongful conversion
amounting to embezzlement’. (People v. Tambara, 192 Cal.
236 [219 Pac. 745].) | The question at issue here is
thus made to depend apon the particular question as to
whether or not in this case it has been proved that the
broker, acting through or with participation of the defend-
ant, applied Brandt’s bonds to his own use in excess of its
rights as pledgee. It may be that, in accordance with the
authorities relied upon by appellant, if the Stock & Bond
Guarantee Company had actually purchased for Brandt
the stocks ordered by him, as in good faith was required by
the nature of the transaction, it would have had the right
to pledge the Serb bonds as security for a loan at the bank;
subject, of course, to Brandt’s right to have them returned
to him whenever his indebtedness to the broker was paid.
But there is evidence which justified the court in finding
that no such purchase of stock for Brandt was actually
made, and that the conditions which might have authorized
the use which was made of the Serb bonds did not exist.
In the brief for respondent we find a careful analysis of

608

the sales records of the Stock & Bond Guarantee Company,
and of BE. K. Fleming & Co., which appears to accurately
summarize the evidence in the record as taken from the books
and documents of those corporations. The books also show
extensively that these transactions shown in the brief are
exemplars of a similar method of doing business, as exten-
sively carried on by these corporations, and by the defendant
as their principal executive officer. There was evidence suffi-
cient to show, as stated by counsel for respondent, that in
reality there was no purchase or sale of the ordered stocks,
and no money advanced for the customer. Hach order
seems to have been handled entirely as a bookkeeping
transaction between Stock & Bond Guarantee Company and
E. K. Fleming & Co. and the defendant BE. K. Fleming. It
follows that neither the defendant or either of his said
companies ‘acquired any interest in the securities placed in
their hands by Brandt’, and that their use of such securities

’ for the purpose of raising money for themselves would con-
stitute grand theft on the theory of embezzlement. The so-
ealled sales were of the character commonly known as ‘wash’
sales, and were in themselves illegal. (Const. of Cal.
art. IV, sec. 26.)

HM ‘Appellant assigns as error that the court overruled
his objections and received in evidence the before-mentioned
books and other records which constitute the numerous ex-
hibits to which in part we have referred. Without going
into a detailed description of these documents, let it suffice
to say that they were properly received because they fur-
nished appropriate evidence to establish the very facts
which, as we have seen, were necessary to develop and
establish the precise and erucial fact that the right to
pledge Brandt’s bonds did not exist. If there were any
errors in rulings upon the objections made, assuredly they
were of minor importance, and without appreciable effect
upon the result of the action.

HM ‘‘Tt is further contended by appellant that there is
no proof whatever that he knew of the limitations or re-
strictions upon the right of Stock & Bond Guarantee Com-
pany to pledge the bonds at the time when he caused such
pledge to be made, or at all. But there can be no doubt
that appellant was the actual and active manager of both
companies; that he employed the subordinates through whom

= 609

he conducted the business of both companies; that ‘daily
sales sheets’ were given to him; that he knew not only in
general but largely in detail the manner in which the busi-
ness was being transacted. The receiver, MacLeod, testified
that when he told appellant that various persons were claim-
ing that they had paid up for stock which should have been
bought ‘and that they had bought stock on contracts that
were supposed to be bought at the time they bought it; and
I asked Mr. Fleming what the condition was. He said,
-“You know as well as I do’. I said, ‘‘What do you mean
by that?’’ He said, ‘‘There is about a quarter of a million
short we haven’t bought stocks.’’’ We think that the evi-
dence is sufficient to justify the inference that at the time
when Brandt’s bonds were pledged to the bank, appellant
kmew that the bonds were being wrongfully used in that
way. (People v. Epstein, 118 Cal. App. 7 [4 Pace. (2d)
555].)

HE ‘Counts three and four of the information differ
from the first count in that the thefts charged relate to
shares of stock purchased through the broker and not to
securities deposited by the customer. The two Stewart
transactions described in the counts three and four, and
the evidence concerning them, are substantially alike. The
customer at the time of ordering the shares to be purchased
for him paid an installment on account of the purchase
price, and from time to time made further payments until
the full purchase price was paid, but the stock never was
delivered. It is contended by appellant that the evidence
is insufficient to prove that the broker ever had actual
possession of the stock, and therefore is insufficient to
establish the corpus delicti of the crime charged. We are
in agreement with the contention that the evidence fails to
show that the broker ever had actual possession of the stock.
On the contrary, in the Stewart transactions, as in the
. Brandt transactions, it might fairly be inferred from the
evidence that the broker never purchased the shares of
stock which he was supposed to be buying for the customer.
The actual embezzlement consisted in the taking of the
money of the Stewarts, and applying it to the broker’s
own use without completing the transaction as in due course
of business its agreement with the customer required it to do.
Hl But appellant further contends that on an information

a

610 ——El

charging theft of described shares of stock he cannot be
convicted of theft of the money paid on account of the pur-
chase. It is contended that this would be a fatal variance
between the allegations and the proof. To this the reply
seems to be sufficient that such difference between the de-
seription of property taken as stated in the information,
and the evidence showing property actually taken, is pro-
vided for by the Penal Code, as amended in the year 1927.
‘When an offense involves the commission of, or an attempt
to commit a private injury, and is described with sufficient:
certainty in other respects to identify the act, an erroneous
allegation as to the person injured, or intended to be in-
jured, or of the place where the offense was committed, or
of the property involved in its commission, is not material.’
(Pen. Code, sec. 956.) The plain intention here is that
when the offense itself is described with sufficient certainty
in other respects to identify the act, a conviction thereof
may be sustained notwithstanding the fact that the descrip-
tion of the property stolen as shown by the evidence is dif-
ferent from the property stolen described in the information.
We, of course, do not mean to’ say that one crime may be
charged in the information and an entirely separate crime
relating to other property, or relating to an entirely dif-
ferent transaction, may be proved, or that a conviction thus
obtained could be sustained. There must be some evidence
that the acts constituting the offense of which the defendant
is convicted are substantially the same as those referred to
in the charge contained in the information. There must be
at least such degree of identity between the allegations in
the indictment or information, and the facts produced in
evidence, that when the defendant has been once in jeopardy
by reason of such charge he shall be fully protected from
another prosecution for the same offense. [J Applying
this test to the case at bar, it is our opinion that the con-
viction of the defendant in accordance with the evidence in
this case is entirely sufficient to protect him from any sub-
sequent prosecution for theft either of the described shares
of Chrysler stock or of the moneys paid by the Stewarts
covering the purchase price thereof.

“In each of the two Stewart transactions the pur-
chaser made payments which in the aggregate constituted
the full purchase price and entitled the customer to the

a a sit

delivery of the stock which was supposed to have been pur-
chased for him, or her. But appellant contends that since
no one of the payments thus made on account of said pur-
chase was of an amount exceeding the sum of $200, therefore
he could not in any event be guilty of any crime greater
than petit larceny. It appears, however, that these pay-
ments of successive instalments upon a single contract did
amount to more than $200 on each contract. The exact time
when the misappropriation was completed is not material
and perhaps is not established by the evidence, more than
that the installments were paid at certain specified times
and that the stock was not delivered when the payments
had been completed and delivery was due. We think that
the case is controlled by the rule stated in People v. Sing,
42 Cal. App. 385, 396 [183 Pac. 865], where it was said:
‘The law is that if the different asportations from the same
owner are prompted by one design, one purpose, one im-
pulse, they are a single act, without regard to time.’ Or
as was said in People v. Hatch, 18 Cal. App. 521, 534 [109
Pac. 1097]. ‘It may happen that an aggregate amount may
finally be appropriated by one act which was received in
many items and at different times.’ ”’

The judgment and order are, and each of them is,
affirmed.

Rehearing denied.

[S. F. No. 14939. In Bank—April 27, 1984.]
C. H. SOOY, Respondent, v. E. W. CERF et al., Appellants.

_ ii

| | 618

Henry Robinson, Martin P. Bruton and’ Herbert A.
Leland for Appellants.

J. H. Sapiro and A. A. Heer for Respondent.

CURTIS, J—The principal question presented on this
appeal may be stated as follows: In a suit by one partner
against another, after dissolution of the partnership, upon
his individual promissory note, may the defendant partner,
in order to diminish or defeat plaintift’s recovery, set up
by way of counterclaim a cause of action for an accounting
for money of the dissolved partnership collected by the
plaintiff partner after the dissolution, in which counter-
claim it is alleged that such accounting will show that
there is in the hands of plaintiff and belonging to defend- -
ant partner a sum in excess of the amount owing on the
note?

Plaintiff instituted this action to recover the balance due
and unpaid on a joint and several promissory note, executed
in plaintiff’s favor by the defendants, one of whom was
Marcel E. Cerf, who filed a separate answer and alleged
therein that the note had been paid. He also pleaded as a
separate defense to said action and by way of counterclaim
certain facts which, if true, would have entitled him to
an accounting for moneys of a dissolved partnership com-
prised of plaintiff and said defendant Marcel E. Cerf and
which had been collected by plaintiff after the dissolution
of said partnership, no part of which had been paid to
said Marcel E. Cerf. It was further alleged that upon such
an accounting it would be found that there was a balance
in the hands of plaintiff belonging to defendant Marcel E.
Cerf from money collected by said plaintiff on account of
the business of the partnership in excess of the amount
then owing on said promissory note. Substantially the
same matters were set up in a cross-complaint by Marcel
EH. Cerf. The other defendants set up similar pleadings

- setting up the same defenses as those interposed by the
defendant Marcel E. Cerf. Upon plaintiff’s motion the -
pleadings of these defendants, in so far as they attempted
to set up said counterclaims and said cross-complaints were

64 a 7

stricken out by the court. At the trial of the action judg-
ment was rendered against all of the defendants, jointly
and severally, for the amount found due on said promissory
note. By section 437 of the Code of Civil Procedure the
pleading of a defendant may contain, among other things,
“A statement of any new matter constituting a defense or
counterclaim.’’ By section 438 of the Code of Civil Pro-
cedure it is provided that ‘‘the counterclaim mentioned in
section 487 must tend to diminish or defeat the pleintiff’s
recovery and must exist in favor of a defendant and against
a plaintiff between whom a several judgment might be had
in the action’.

HI Measured by the requirements of section 438 the
counterclaim interposed by the defendant Marcel E. Cerf
in his answer possesses all the essential elements of a coun-
terclaim. It tends to diminish or defeat plaintifft’s recovery.
It exists between the plaintiff and defendant Marcel EB. Cerf
and between said two parties a several judgment might
be had in said action. J The fact that plaintiff’s action
on the promissory note is an action at law, and the defense
by counterclaim asking for an accounting is equitable in
character does not deprive the defendant of his right ‘to
interpose said defense. In Lerry Trading Corp. v. Barsky,
210 Cal. 428, 487 [292 Pac. 474], this court said: “‘It is
well settled that under the system of code pleading equitable
defenses and equitable counterclaims may be set up in
actions at law, as well as legal defenses and counterclaims
in suits in equity.’? The reason for permitting such pro-
cedure is clearly set forth by Professor Pomeroy as follows:
“In an equitable action, a counterclaim consisting of an
equitable cause of action, and demanding equitable relief,
may be interposed if it possesses all the other elements
required by the definition. ... As the codes in express
terms permit equitable defenses in such actions, and as in
the self-same provision, and by means of the same language,
the statute authorizes the joining of as many defenses and
counterclaims, whether legal or equitable, or both, as the
defendant may have, to deny the possibility of an equi-
table counterclaim in a legal action, would make it neces- -
sary, if any consistency were preserved, to deny also the
possibility of an equitable defense. The courts, as may be
seen from the citations made below, have, with a few unim-

a a ois

portant exceptions, been unwilling to nullify the language,
and defeat the design of the legislature in this manner,
and following its plain meaning and import, they have
freely admitted and sustained the equitable counterclaim
in all actions, whether legal or equitable, where that form
of relief was appropriate, and was authorized by the de-
seriptive terms of the statute.’? (Pomeroy, Code Remedies,
5th ed., p. 1085, see. 640.)

The case of Terry Trading Corp. v. Barsky, supra, has been
followed by this court in a recent opinion wherein it was
said: ‘‘Under the 1927 amendment to section 438, Code of
Civil Procedure, the sole requisites of a counterclaim are
that it ‘must tend to diminish or defeat the plaintift’s
recovery, and must exist in favor of a defendant and
against a plaintiff between whom a several judgment might
be had in the action’, Under this amendment it is not
necessary that there be any connection between the cause
of action set up in.the complaint and that which forms the
basis of the counterclaim. (erry Trading Corp. v. Barsky,
210 Cal. 428, at p. 435 [292 Pac. 474].) The facts of the
cited case are particularly germane to the case now before
us. In that case plaintiff sued on a note given for services
performed by virtue of a written contract. In the instant
ease the plaintiff sued for the price of goods sold under a
written contract. There, as here, the defendants averred
an assignment to plaintiff of accounts receivable and prayed
for an accounting. Defendants therein also prayed for
damages for failure of the services performed by plaintiff
to comply with the contract. In the instant case defendants
seek damages because, they allege, the product sold to them
was not as represented by plaintiff. In disposing of the
appeal in Terry Trading Corp. v. Barsky, supra, we held
that obviously the claims for accounting and damages were
the subject of counterclaim under the section as amended.’’
(Luse v. Peters, 219 Cal. 625 [28 Pac. (2d) 357].)

HM Respondent concedes the foree and effect of the
above authorities, but contends that they do not apply to
an action between partners or between persons who were
formerly partners, when the equitable defense relates to
matters growing out of the partnership business. The posi-
tion of the respondent is that in an action at law between
partners upon a claim not connected with the partnership

sis — —

business, the defendant may not set up by way of counter-
claim a plea that an accounting of the partnership matters
would show that plaintiff is indebted to the defendant in an
amount which would diminish or defeat the plaintiff’s
yvecovery. This claim is based upon the well-established
principle of law that one partner, even after dissolution of
the partnership, cannot sue the other at law upon any
matter arising out of the partnership business. Respondent
seeks to extend this principle of law to an action in which,
as in the case before us, the defendant in an action at
law, as an equitable defense to plaintiff’s recovery, asks for
an accounting of the affairs of a partnership existing be-
tween the plaintiff and defendant. In support of his
contention respondent relies upon the following cases: Case
y. Maxey, 6 Cal. 276, Haskell v. Moore, 29 Cal. 437, Wood
y. Brush, 72 Cal. 224 [18 Pac. (2d) 627], Lane v. Turner,
114 Cal. 396 [46 Pac. 290], and Johnstone v. Morris, 210
Cal. 580 [292 Pac. 970], as well as decisions from other
jurisdictions. The first two cited cases were decided under
the old Practice Act. A counterclaim under section 47 of
this act, except where plaintifi’s cause of action and de-
fendant’s arose out of contract, was limited to the transac-
tion set forth in the complaint, or connected with the subject
of the action. It was accordingly held in the first of said
actions that the counterclaim was based upon a division
of cattle owned by the parties in partnérship, and as such
division had nothing to do with the consideration of the
note therein sued on, it could not be set up as a counter-
claim or equitable defense to the action. Therefore the
appellate court sustained the action of the trial court in
striking out the counterclaim, because the subject matter
thereof ‘‘had nothing to do with the consideration of the
note sued on”’, and not because it involved a partnership
matter. What slight reference is to be found to the question
now before us in Haskell v. Moore, supra, must, of course,
be construed in the light of the provisions of the Practice
Act regarding matters which may be set up in a counter-
elaim. The only authorities cited in Lane v. Turner, supra,
are the two cases first above cited, and which we have shown
were decided when the statute permitting a counterclaim
was entirely different from the present code section upon
the subject. In Wood v. Brush, supra, the partnership ac-

a a 617

count set forth in the counterclaim was against the plain-
tiff and sundry other persons, and for this reason the court
held that it was not a counterclaim ‘‘existing in favor of a
defendant and against a plaintiff, between whom a several
judgment might be had in the action’”’ within the purview of
section 438 of the Code of Civil Procedure. In the case of
Johnstone v. Morris, supra, plaintiff sued to collect the bal-
ance due on a promissory note, executed by the defendant.
The parties had formerly been partners and the note was
given in part payment of plaintiff’s interest in the partner-
ship property. Defendant filed a counterclaim and also a
eross-complaint, in each of which pleadings he claimed that
while the partnership was in existence and before his pur-
chase of plaintiff’s interest therein, the plaintiff, without
the knowledge of defendant, fraudulently appropriated, by
means of false entries in the account books of the partner-
ship, funds belonging to the partnership exceeding in
amount the balance due on said promissory note. The ac-
tion was tried by a jury which returned a verdict that plain-
tiff take nothing by his action. He appealed from the judg-
ment entered upon the verdict, and, among other things,
contended that the cross-complaint ‘‘appeals to the equity
side of the court, and that on those issues a right to trial
by jury does not exist’. In discussing the question thus
presented this court stated that ‘‘It is an almost, if not uni-
versally, accepted rule, that, in the absence of statutory
provision, an action at law as distinguished from an action
in equity cannot be maintained between partners with re-
spect to partnership transactions. It is well settled that
the mere fact a dissolution of the partnership has taken
place before the action is brought does not change the rule
that no action at law can be maintained between partners
(citing authorities). But to this rule that no action at law
will lie between partners, even after dissolution, there is -
one well-recognized exception.’”? The court then goes on to
show that the peculiar facts of that case bring it within the
exception rather than the rule, and coneludes its discussion
with the following conclusion: ‘‘From the above reasoning
it follows that, the action being one at law, the defendant
was entitled to a jury trial.’’ It will be seen that the ques-
tion involved in that action and determined by the court was
whether the cross-complaint set up an equitable or a legal

618 Pe iz

eause of action, and not whether the defendant could main-
tain his cross-complaint which set forth matters relating to
the former partnership between the parties. In fact, it
seems to have been conceded that such a defense, whether
by cross-complaint, or counterclaim, could be maintained
by the defendant, but plaintiff contended that it was an
equitable defense, and therefore defendant had no right to
have the issues raised thereby tried before a jury. We are
satisfied from a careful reading and study of these .cases,
and any others bearing upon this subject, that they do not
decide, nor has it ever been decided in this state since the
adoption of the codes, that under section 438 of the Code
of Civil Procedure one partner may not set up as a defense
a counterclaim against the plaintiff asking for an account-
ing of the partnership affairs and offsetting the amount
found to be due the defendant by the accounting against
the amount found to be due the plaintiff on his cause of
action set up in the complaint. Respondent has cited au-
thorities from other jurisdictions in which it may be con-
ceded there is language and rulings which support his con-
tention, but evidently the statutes of those jurisdictions
contain no provision as broad as our present statute upon
the subject of counterclaims.

Our conelusion therefore is that the trial court erred in
striking out the counterclaim filed herein by the former
partner of the plaintiff. As we view the question, any
other conclusion would run directly counter to the plain
provisions of section 488 of the Code of Civil Procedure,
which since its amendment in 1927, provides that a counter-
claim may be filed when it tends ‘‘to diminish or defeat
the plaintiff’s recovery and must exist in favor of a defend-
ant and against a plaintiff between whom a several judgment
might be had in the action’’. This conclusion is in line with

* our recent decision in Luse v. Peters, 219 Cal. 625 [28 Pac.
(2d) 357], where we held that ‘‘Under the 1927 amendment
of section 438, Code of Civil Procedure, the sole requisites
of a counterclaim are that it ‘must tend to diminish or de-
feat the plaintiff’s recovery and must exist in favor of a
defendant and against a plaintiff between whom a several.
judgment might be had in the action’.’”’ It is true, as re-
spondent says, that this was not an action where the counter-
claim involved a partnership accounting. But we see no

| | 619.

reason why, if a counterclaim is allowed in every case where
it meets the requirements of the code section, any exception
should be made in case of an action between partners. It
is true that one partner may not sue, even after dissolution
of the partnership, the other partner in an action at law.
He may, however, before dissolution, sue for an accounting
and ask for a dissolution, and after dissolution he may sue
for an accounting. This, it is true, is an equitable proceed-
ing. But it is just as much an equitable proceeding if set
up by way of counterclaim by the defendant, as it would
be in an independent action wherein a plaintiff sues for an
accounting. The inclusion of such a demand in a counter-
claim does not in any way deprive it of its equitable char-
acter, nor does it change the manner in which the issues
arising out of said counterclaim are to be tried. J
‘Where a counterclaim is set up as an equitable defense to
an action at law, the whole proceeding, in practical effect,
constitutes two independent causes of action—one by the
plaintiff on his complaint, and the other by the defendant
on his counterclaim. (Pacific Finance Corp. v. Supérior
Court, 219 Cal. 179 [25 Pac. (2d) 983, 90 A. L. R. 384].)
The issues therein are tried separately and upon demand
of either party it would be the duty of the trial court to
grant a jury trial to determine the issues arising under
plaintiff’s complaint and to determine the equitable issues
arising under the counterclaim without a jury, except as
the court might call a jury to act in an advisory capacity.
In such a procedure the partners may have their differences
determined in a court of equity, and the rule against one
partner suing another in an action at law regarding partner-
ship property is not violated.
It is conceded by the plaintiff that if the defendant

Marcel E. Cerf, one of the makers-of the note, had the right
in this action to set up the counterclaim pleaded, then the
right to set up the same defense by way of counterclaim was
available to the other defendants, since the note sued on was
joint and several.

Tt follows that the court erred in striking out each of the
counterclaims filed herein. For this reason the judgment
should be reversed, and it is so ordered.

Preston, J., Shenk, J., and Waste, C. J., concurred.

620 |

{Crim. No. 3729. In Bank—April 28, 1934.]

THE PEOPLE. Respondent, v. PIERRE pv’A PHILIPPO,
- Appellant.

622 Le |
|

Pierre d’A Philippo, in pro. per., for Appellant.

U. S. Webb, Attorney-General, J. Charles Jones, Deputy
Attorney-General, Gerard C. Darrah, District Attorney, and
Ward A. Hill, Assistant District Attorney, for Respondent.

PRESTON, J—We hereby adopt as part of this opinion
the following language from the opinion prepared by Mr.
Justice Thompson, heretofore rendered herein by the honor-
able District Court of Appeal for the Third Appellate Dis-
trict:

“The defendant Pierre d’A Philippo was charged by an
indictment filed in San Joaquin county July 28, 1932, with
the crime of grand theft, together with two prior convie-
tions of separate forgeries. The indictment was drawn in
seventeen counts, separately charging the defendant with
the appropriation of numerous shares of stock belonging
to different named individuals, upon specified dates from
April 7, 1930, to April 9, 1931, aggregating the value of
$11,035. Prior to the trial six of these counts were dis-
missed. Upon arraignment the defendant pleaded not guilty
to each of the separate charges of theft, and also pleaded
not guilty to one of the charges of prior conviction of
forgery. He admitted a prior conviction of forgery which
occurred in the superior court of Santa Clara county.
At the trial he was convicted of each of the remaining
counts. except the first and second ones. A verdict of guilty

es 628

was rendered against him on counts Nos. 3, 4, 7, 8, 9, 10,
11, 16 and 17, which charged him with the theft of stock
aggregating the value of $8,330. He was also found guilty
of both charges of prior convictions of felonies, to-wit:
forgeries. He was thereupon sentenced to imprisonment in
the state prison at Folsom, for the term of his life, under
the provisions of section 644 of the Penal Code.

“The appellant contends the court erred in receiving evi-
dence during the trial, in his absence, and also in permitting
testimony to be adduced contrary to the inhibition of sec-
tion 1025 of the Penal Code, relative to the prior conviction
of forgery in Santa Clara county, to which he had pre-
viously admitted his guilt. It is claimed the pronouncing of
life sentence upon the defendant as an habitual criminal
was unauthorized and void, since at the time of the com-
mission of the crime of grand theft by the defendant, section
644 of the Penal Code did not include forgery among the
felonies, the prior conviction of which might then be con-
sidered in determining whether the accused was an habitual
criminal. It is further asserted section 644 of the Penal
Code is ew post facto and unconstitutional for the reason
that it provides for a double penalty for former crimes.
Finally, it is asserted the verdict is the result of coercion
and misconduct on the part of the judge, and that the dis-
trict attorney was also guilty of prejudicial misconduct which
precluded the defendant from receiving a fair trial.

“Section 644 of the Penal Code is not ea post facto
or unconstitutional on account of its provision increasing the
penalty upon conviction of a felony when the accused at
the same time is also found guilty of prior convictions
of two other felonies which are therein mentioned. (Ex
parte Gutierrez, 45 Cal. 429; People v. Vaile, 112 Cal. App.
258 [296 Pac. 901]; People v. Rosencrantz, 95 Cal. App.
92 [272 Pac. 786]; People v. James, 71 Cal. App. 874 [235
Pac. 81]; 8 Cal. Jur. 641, sec. 614; Cooley’s Const. Lim.,
7th ed., p. 382.) ”?

However, the foregoing observation does not scem
to meet the situation before us. Here the crimes for which
defendant stands convicted were committed during the
period from April 7, 1930, to April 9, 1931. The previous
crimes for which he was convicted were forgery. Forgery
did not become an ingredient of the provisions relating to

624 Po 7

habitual criminals until August 19, 1931 (sec. 644, Pen.
Code; Stats. 1931, p. 1052); therefore, had defendant been
convicted subsequent to April 9 and prior to August 19,
1931, he could not have been sentenced as an habitual
criminal. Hence, to so sentence him for said crimes sub-
sequent to August 19, 1931, was to palpably increase his
punishment for the offenses after their commission, To so
interpret the amendment to the statute is clearly to violate
article I, section 9, clause 8, of the Constitution of the
United States. ‘And this clause has been interpreted as
meaning that no person is to be subjected by statute either
to a penalty for an act which at the time of its commission
was not the object of prosecution, or to a penalty higher than
was attached to such act at the time of its commission.’”’
(Wharton’s Criminal Law, 12th ed., vol. 1, sec. 41, p. 58.
See, also, Fletcher v. Peck, 6 Cranch, 87 [3 L. Ed. 162];
Cooley’s Const. Lim., 8th ed., pp. 541-545, and cases cited.
Also, In re Lee, 177 Cal. 690, 695 [171 Pac. 958].

In State of Iowa v. Jones, 128 Fed, 626, 628, it is said:
“And what is an ew post facto law? In Fletcher v. Peck,
6 Cranch, 87 [8 L. Ed. 162], Chief Justice Marshall said:
‘An ex post facto law is one which renders an act punish-
able in a manner in which it was not punishable when it
was committed.’ A better, or more accurate definition has
not been given. From this definition it is seen that the
punishment provided for when the crime was committed is
the punishment that must be imposed. If no punishment
was then provided for, none can be imposed by subsequent
legislation. If punishment was then provided for, subse-
quent legislation cannot be enacted, increasing the punish-
ment, and such legislation can only refer to subsequent
erimes. The punishment can be lessened, but never in-
ereased, as against anyone, for a crime already committed.
No more beneficent provision is found in the Constitution for
the protection of the individual, and it must be and will
be enforced on behalf of the bad citizen or criminal as well
as for the good citizen.’’

Quoting again from said opinion of the honorable Dis-
trict Court of Appeal:

Hi “The defendant asserts that the prior conviction of
a felony in the United States Court for China, at Shanghai,
is void for the reason that that court was without juris-

ee 625

diction. A certified copy of that judgment was received
in evidence over the objection of the defendant, showing
that in 1914 he was convicted of forgery in that court
under the name of Peter A. Grimes. The only objection
which was offered to this record was that Peter A. Grimes
was not shown to be the same person as the defendant, and
upon the further ground that there ‘has been no foundation
laid’. The identity of the defendant as the same Peter A.
Grimes, who was convicted of forgery in that court at
Shanghai, was satisfactorily established. The defendant
failed to specify any other particular reason why the
foundation for the introduction of the certified judgment
was not sufficiently laid. The court therefore properly ad-
mitted the document in evidence as proof of the former
conviction of the defendant. [J The defendant failed to
object to the introduction of the record on the ground of
a lack of jurisdiction. We are directed to no evidence
tending to show a lack of jurisdiction on the part of the
United States Court for China, either of the person of the
defendant or of the crime of forgery, with which he was
charged. In the absence of proof to the contrary, the
jurisdiction of a court in a sister state or in a foreign
country, from which a duly authenticated judgment which
is regular upon its face is presented in evidence, will be
presumed. (Collins v. Maude, 144 Cal. 589 [77 Pac. 945] ;
UcHatton v. Rhodes, 143 Cal. 275 [76 Pac. 1036, 101 Am.
St. Rep. 125].) It is said in 34 ©. J., page 1140, section
1615 (b):

“«Tn an action on a judgment recovered in another state,
the record of which is duly authenticated and produced in
evidence, it will be presumed that the court had jurisdic-
tion of the subject-matter and the parties, in the absence of
proof to the contrary.’

“Section 1963, subdivision 16, of the Code of Civil Pro-
cedure provides that in the absence of evidence to the con-
trary, the presumption is satisfactory proof:

«That a court or judge, acting as such, whether in this
state or any other state or country, was acting in the law- ~
ful exercise of his jurisdiction.’

“Since there is no evidence to the contrary we must
assume that the United States Court for China had juris-
diction to try criminal cases wherein an accused was

P|

626 Le |

properly charged with forgery. In the absence of proof
to the contrary, we must assume that the law with respect
to the prosecution of forgery in the United States Court
for China is the same as it is in California. In the case of
Wickersham v. Johnston, 104 Cal. 407 [88 Pac. 89, 48 Am.
St. Rep. 118], it is said in that regard:

““«There was no evidence at all tending to show what
the law was in the foreign country touching any of the
questions which are raised here; and it must, therefore, be
assumed that the law with respect to those matters was the
same there as in California.’

“A United States Court for China was created by an
act of Congress June 30, 1906. (22 U. S. GC. A., p. 98, see.
191, ¢. 3934, 34 Stats. 814; U. S. Comp. Stats. Supp. 1907,
p. 797.) That court was given jurisdiction over civil and
criminal proceedings involving citizens of the United States
in China. In the absence of statutory provisions with re-
lation thereto, the procedure of the common law is made
applicable to criminal trials in China. (Biddle v. United
States, 156 Fed. 759.) Forgery was a crime, punishable by
Jaw, under the common law. (2 Bishop’s New Crim.
Law, p. 300, sec. 528.) There can be no doubt the United
States Court for China, which was located at Shanghai, had
jurisdiction over the person and of the criminal charge of
forgery, for which the defendant was there tried and con-
victed.

HI ‘It is claimed prejudicial error occurred by per-
mitting evidence to be adduced at'the trial, contrary to the
inhibition of section 1025 of the Penal Code, regarding the
defendant’s prior conviction of forgery in Santa Clara
county in spite of the fact that he had pleaded guilty to
that particular charge. There is no merit in this conten-
tion. While the defendant admitted his guilt of the former
conviction of forgery in Santa Clara county under the name
of James H. Rogers, he pleaded not guilty to the charge of
former conviction at Shanghai, China, under the name of

_ Peter A. Grimes. He also denied that he had ever gone
by the name of Grimes. It therefore became necessary in
proof of the Shanghai conviction to show that the Peter A.
Grimes who was convicted in China in 1914 was this de-
fendant. He was fully identified by an expert witness as
the same individual, by comparison of a photograph and

oar

reproductions of his fingerprints which were used in con-
nection with his conviction at Shanghai, with his physical
appearance at the trial of this case, and photographs of his
fingerprints which were used in connection with the Santa
Clara trial.

HE ‘It is not error to admit evidence incidentally con-
nected with a prior conviction of the defendant, to which
he has pleaded guilty, provided such evidence is competent
proof of any material fact necessary to establish his guilt
of the principal offense or any other alleged prior con-
vietion included in the charge for which he is being tried,
of which he has not admitted his guilt. (People v. Mc-
Farlan, 126 Cal. App. 777 [14 Pae. (2d) 1066]; People v.
Booth, 72 Oal. App. 160 [236 Pac. 987]; People v. For-
rester, 116 Cal. App. 240 [2 Pac. (2d) 558].) | More-
over, the defendant waived any objection to a reference to
the prior conviction to which he had pleaded guilty, by
subsequently becoming a witness in his own behalf and
voluntarily referring to that case in an effort to explain
the facts and excuse the crime. (People v. Fontes, 110
Cal. App. 141 [293 Pac. 835].) Reference to the defend-
ant’s former conviction in Santa Clara County became
necessary on account of his denial of his identity as Peter
A. Grimes, as a matter of impeachment, which was compe-
tent. To protect the defendant against an improper con-
sideration of the evidence of the former conviction, the
court charged the jury as follows:

«“«Mhe defendant, Pierre d’A Philippo, has admitted
that he had been previously convicted of felony. You
must not consider this fact for the purpose of raising a
presumption or inference of his guilt of the offenses of
which he now stands charged. Evidence of former con-
viction of felony can be considered by you only for the
purpose of impeachment of the defendant as a witness.’

“The record does not indicate that any evidence was
adduced at the trial in the absence of the defendant. It is
true that the court adjourned the trial on Monday after-
noon, December 12, 1932, on account of the illness of the
defendant. After the defendant left the courtroom a dis-
cussion arose between respective counsel regarding the
urgency of establishing proof of the former conviction which
occurred in China, by a foreign witness who was then

628 Pe iz

present, but who was required to leave the city that day.
To accommodate the witness, the defendant’s attorney
agreed to stipulate to the authenticity of the record when
court again convened. Thereupon the jury was dismissed
until the following day. When court again convened no
objection -was made to the authenticity of the record. A
statement in open court, in the presence of the defendant,
was then made regarding the substance of the former stipu-
lation, which was conceded by the attorney for the defend:
ant. The district attorney then proceeded to read the
record in evidence, subject to the objection only that, ‘It
don’t tend to prove or disprove any issue in this case, and
that the statement is incompetent, irrelevant and imma-
terial.’ The former agreement, which was made in the
absence of the defendant, was harmless. The same stipula-
tion was subsequently made in open court in the presence
of the defendant, by affirming the district attorney’s state-
ment that it had been previously agreed upon. Error may
therefore not be predicated on that circumstance.

“There is nothing in the record to indicate that
the judge of the court or the district attorney was guilty
of any prejudicial misconduct in the trial of the case.
The defendant appears to have had a fair and impartial
trial. The verdict and judgment are adequately supported
by the evidence.

HE ‘Nor was there any irregularity or coercion in
procuring or returning the verdict. The only thing to
which the defendant objects is that the jury first returned
into open court and presented a proposed verdict in which
it appeared they had found the defendant guilty of many
counts contained in the indictment, but in which they had
failed to agree wpon several other counts. Before the ver-
dict was recorded by the clerk, the judge observed this
omission, and called the attention of the jury to that fact,
asking them generally if they thought further consultation
might aid them in agreeing to the remaining counts. Sev-
eral jurors said they believed they might so agree. Nothing
was said by the court intimating whether the jury should
convict or acquit the defendant on those counts. The
jury did retire and again deliberated on their verdict.
They subsequently returned into court and formally ren-
dered their verdict, in which they had agreed to the de-

De 629

fendant’s guilt with respect to all of the counts except two,
which still remained without agreement thereto. The ver-
dict was then accepted, read to the jury and confirmed by
the members thereof, and formally recorded by the clerk.
There was no error in this procedure.’’

It appearing, as above stated, that the trial court was
without jurisdiction to adjudge defendant an habitual
criminal, such judgment is hereby reversed with directions
to the court below to resentence defendant as required by
law.

Langdon, J., Curtis, J., Shenk, J., Waste, 0. J., and
Seawell, J., concurred.

. .
[S. F, No, 14580, In Bank—April 28, 1934.]

W. C. RICE, Respondent, v. FRANK P. TAYLOR et al.,
Defendants; AMERICAN SECURITIES COMPANY
(a Corporation) et al., Appellants.

2
ey
3S

McKee, Tasheira-& Wahrhaftig for Appellants.

Henry E. Monroe, as Amicus Curiae on Behalf of Appel-
lants.

Charles L. James for Respondent.

PRESTON, J.—This appeal presents the single question
as to whether plaintiff Rice or defendant Pacifie Bond and
Mortgage Company has the prior lien upon a residence lot,
and improvements thereon, at 101 Cambridge Avenue, San
Leandro, California. Admittedly defendant Taylor was in-
debted to both these parties and was the record owner of
said lot.

On October 15, 1925, an encumbrance of some $4,000
existed on said property in favor of the Mercantile Trust
Company, a banking corporation. On said date Taylor,
who was a real estate broker and presumably versed, by
both experience and observation, in the art of conveyancing
and eneumbrancing real and personal property, executed,
with his wife, to the plaintiff, W. C. Rice, a document, on’

SE 62

the letter-head of ‘‘Taylor Sales Co., Importers and Job-
bers, Hardware Specialties, 354 Tenth street, Oakland, Cali-
fornia’, in the words and figures following:

“For value received we promise to pay to W. C. Rice,
two years from date hereof, the sum of .. . $6,250 with
interest at 7% per annum. As security for the above, we
pledge our equity in property at 101 Cambridge Ave. San
Leandro, Cal., and the Taylor Sales Co., 350 10th St.,
Oakland, Cal. In the event of the decease of cither party
we pledge our estate for the amount. (signed) Frank P.
Taylor (signed) Antionette H. Taylor.’’ This document
was acknowledged by a subscribing witness, certified by a
notary public and recorded, at request of plaintiff, on De-
eember 4, 1925, in liber 1209, page 76, of official records of
Alameda County.

On March 12, 1926, said Taylor and wife executed an-
other deed of trust on said property to secure the sum of
$550, owing to one M. A. Camp, and while still in this
precarious financial condition, and on September 18, 1926,
they applied to the Pacific Bond and Mortgage Company
for a loan to refund the indebtedness shown by the two
encumbrances above described, apparently without reference
to the claim of plaintiff Rice. Taylor, on said date, of his
own account, also applied to the Alameda County Title In-
surance Company for a policy of title insurance on said
property in favor of a contemplated mortgagee in the sum
of $4,500. He later received from the title company a pre-
liminary report, which contained the following: ““NOTE:
There appears of record in Liber 1209 of Official Records,
page 76, Alameda County Records, the copy of a promissory
note, dated October 15, 1925, executed by the above named
vestees and payable to W. C. Rice in the sum of $6,250.
Said note contains this statement, ‘as security for the above
we pledge our equity in the property located at No. 101
Cambridge Ave.’ No opinion expressed as to the effect
thereof.””

Taylor failed to exhibit this report to the mortgage com-
pany and said company was not informed, but was without
actual knowledge at all times herein, of the existence of
said document referring to the $6,250 loan. Naturally it
was in the interest of Taylor to conceal it from the loan
company, for to reveal the contents of said report would

622 a a

have been to impair or destroy his chance of refinancing
his indebtedness. The mortgage company later agreed to
make the loan and prepared two promissory notes and two
deeds of trust naming itself as payee and beneficiary, the
first for $4,000 and the second for $550. On September 16,
1926, it delivered these deeds of trust in escrow to said
title company, along with a check, with instructions that
the trust deeds, when recorded, should be and become first
and second record liens respectively on said property. Said
instructions also provided for the issuance of a policy of
title insurance, payable to it, in the sum of $4,500, and it
agreed with the title company as follows: ‘‘It is understood
that your liability under the evidence of title herein re-
ferred to shall be based upon the RECORD TITLE ONLY
and that you shall not be liable for secret defects of title
not appearing of record, nor for forgery, nor for false per-
sonation, either as to instruments already of record or
those involved in this escrow.” .

In January, 1930, plaintiff instituted this action to re-
form the above set out instrument executed to him and to
have it construed as a real estate mortgage on said lot, and
foreclosed. Defendant mortgage company answered plead-
ing itself to be a bona jide encumbrancer for value without
notice. The court made all findings in favor of plaintiff,
reforming the instrument and deereeing its priority and
foreclosure as a real estate mortgage. This judgment pro-
voked the present appeal. The other defendants named in
the caption are without pecuniary interest in the result
thereof.

For a correct understanding of some of the legal ques-
tions involved, it is necessary to further state that the re-
eorder of Alameda County keeps but one set of numbered
official books, that allowed by section 4131 of the Political
Code. He also follows the ‘‘general index system’’ pro-
vided by the same code, section 4132, subdivision 26. The
documents here in question were noted in said general
grantors and grantees indices under the column marked
“title”, ‘note and pledge as security’. If they consti-
tuted a real estate mortgage, the proper indexing would
have been to note them under a column marked, ‘‘title’’,
“mortgage of real property’’; if considered a chattel mort-

| as 633

gage, they should have been noted under a column marked,
“‘title’’, “‘mortgage of personal property”’.

Appellant makes three basic contentions: (1) That it
had no actual notice of said instruments; (2) that it had
no constructive notice thereof because of the improper in-
dexing, and (3) that it had no imputed knowledge thereof
because the title company, that discovered the documents,
was not its agent respecting the condition of title to the
property.

‘We have been led to the conclusion that appellant is cor-
rect in all of its said contentions. The first one may be dis-
posed of without further comment as no satisfactory evi-
dence is found in the record to show that appellant at any
time prior to taking said encumbrance had actual notice of
the existence of said instruments.

HM Sccondly, a conveyance, to impart constructive no-
tice to subsequent purchasers or mortgagees, must be ac-
Jmowledged, certified and recorded as prescribed by law.
(Civil Code, section 1218.) In Cady v. Purser, 181 Cal.
552, 555, 556 [63 Pac, 844, 82 Am. St. Rep. 391], it was
held that a compliance with section 1170 of the Civil Code
would not alone be effective against subsequent pur-
chasers or mortgagees, but in addition section 1218 of
the Civil Code must be complied with. It was further
held, with respect to constructive notice: ‘The principle
upon which the rule rests is, that as under the provisions
of the recording act, if the grantee of an interest in lands
would protect himself against subsequent purchasers or en-
cumbrancers, he must give notice of his interest, and as the
statute provides for constructive notice in the place of
actual notice, it is incumbent upon him to comply with all
the requirements prescribed for such constructive notice,
one of which is the correct transcription of the instrument
into the appropriate book.’’ In that case a sheriff’s deed
was erroneously recorded in a book entitled ‘‘A’’ of ‘‘Bills
of Sale and Agreements’’, and it was held that such a
recordation failed to impart constructive notice of subse-
quent encumbrancers or mortgagees. This ruling was modi-
fied by statute to hold that notice was imputed if the instru-
ment was properly indexed as required by statute (Pol.
Code, sec. 4135a). See, also, Central Pac. R. Co. v. Droge,
171 Cal. 32 [151 Pac. 663]. California may, therefore, be

34 a —

classed as one of those states which has an ‘“‘index system
of recording’. See Ludy v. Zumwalt, 85 Cal. App. 119
[259 Pace. 52].

In James v. Newman, 147 Iowa, 574 [126 N. W. 781], it
was said: ‘‘In order to impart constructive notice to third
persons of any instrument of transfer by one person to
another, the statute contemplates and requires that it be
properly acknowledged by the parties, and that it be filed
for record and spread upon the records by the county re-
corder, and that it be properly indexed. ... We know of
no rule of law that would justify us in dispensing with
these prerequisites to constructive notice.’’ Other states,
in addition to Iowa, holding similarly are Wisconsin, Wash-
ington, Pennsylvania and North Carolina. See note to the
ease of Parry v. Reinertson, 208 Iowa, 739 [224 N. W. 489],
found in 63 A. L. R. 1051, note, pages 1057-1066.

The indexing of the instrument here involved as a
“note and pledge as security’? did not impart to subsequent
encumbrancers constructive notice of a real estate encum-
brance.

In Koch v. West, 118 Iowa, 468 [92 N. W. 663, 96 Am. St.
Rep. 394], it was said: ‘‘The purchaser is not bound to look
beyond the proper index for information as to conveyances,
and, if the index shows none, there is no constructive notice
of any.”’

Here a reading of the index alone would not even sug-
gest a real estate encumbrance but, on the contrary, a trans-
action respecting chattels would come to the mind. While
the word ‘‘pledge’’ may in certain connections be loosely
used to denote a real estate encumbrance as well as one of
chattels, still, where standing alone as a subject without
qualifying surroundings, we cannot see how it can be said
that real estate is even hinted at. If the index is to be
held material at all it must give some direct reference to
the true nature of the instrument referred to. Respondent
admits if ‘‘a title so shows that its character is such that it
would be unreasonable to suppose it might affect the prop-
erty under search’’, the indexing is insufficient. We believe
this to be just such a case.

We have deemed it unnecessary to discuss the legal effect
of the instrument itself to charge one with actual notice of
its contents, with knowledge that it affected real property.

a a 635

This, we believe, is a serious question, but we shall not
pause to decide it.

HM Lastly, assuming the instrument to be one encum-
brancing real property at the street address given, was
knowledge of the contents thereof by the title company,
imputed to the mortgage company, when it- agreed to ac-
cept the policy of insurance and complete the loan? It is
to be here noted that Taylor, the record owner of the prop-
erty, secured the search applied for and presumably paid
the insurance premium. The extent of the special authority
conferred upon the title company by the mortgage company
was to complete the exchange of documents necessary to
consummate the transaction, all conditioned upon its writing
the policy insuring the title with the new deeds of trust as
first and second liens respectively. Was the title company,
in tendering the policy of insurance, acting as the agent of
the mortgage company in the matter of the title to this
property?

Admittedly, were the title company a mere searcher of
titles, with accompanying duty to report its findings to its
employer, the relation of agent and principal would be
established; the same would be true were the relation that
of attorney .and client. (Bogart v. George K. Porter Co.,
193 Cal. 197 [223 Pac. 959, 81 A. L. R. 1045]; Rawer v.
Hertweck, 175 Cal. 278 [165 Pac. 946]; Mabb v. Stewart,
147 Cal. 418 [81 Pae. 1073]; Wittenbrock v. Parker, 102
Cal. 98 [86 Pac. 374, 41 Am. St. Rep. 172, 24 L. R. AL
197].) The liability of the searcher or of an attorney
would be for negligence and not as an insurer or guarantor.
Title insurance is quite a different contract to that of the
abstractor of titles. Our Civil Code, section 453¢, defines
a policy of title insurance as follows: ‘‘ Any written contract
or instrument purporting to show the title to real property,
or furnish information relative thereto, which shall in
express terms purport to insure or guarantee such title or
the correctness of such information, shall be deemed a policy
of title insurance.’’ Such contract contains no elements
of agency but is the indemnity agreement of an independent
contractor. °

To write title insurance the company must conform to
the specifications required by law and in ‘general submit
to the same supervision as other insurance companies. The

636 fe |

nature of the title insurance contract is discussed in the
case of Title Ins. & Tr. Co. v. Los Angeles, 61 Cal. App.
232, 235 [214 Pac. 667], as follows: ‘‘Title insurance had
become a recognized form of insurance in California and
elsewhere prior to the year 1910, although it is more modern
in its origin than are many other branches of insurance
business. It has been defined as an agreement whereby the
insurer, for a valuable consideration, agrees to indemnify
the insured in a specifie amount against loss through de-
fects of title to real estate, wherein the latter has an interest,
either as purchaser or otherwise. (88 Oye. 344.) Gener-
ally, in other kinds of insurance, the policy protects the
assured against matters that may arise during, and only
during, a stated period after the issuance of the policy, but
the risks of title insurance, although they may be referable
to the contingency of future loss, are only designed to
save the assured harmless from loss through defects, liens,
and encumbrances that may affect or burden the title at the
time when the certificate or policy is issued. There is no
implied agreement to go beyond the conditions existing at
the time the policy is issued and to assume-a general liability
to indemnify against future encumbrances. (388 Cyc. 349,
350.) But the distinction thus existing does not deprive
title insurance of any of the essential elements which char-
acterize the contract of insurance.’’ See Cooley’s Briefs on
Insurance, vol. 1, pp. 21, 324.

The insured and the insurer deal at arm’s length. There
is no room for the operation of a fiduciary relationship.
The title company is in business for profit. It may be
willing to assume risks that the insured might think im-
prudent. The duty to report its findings as to the nature
of the title of the property involved to him is nowhere en-
joined. The fact that the company often reports its findings
preliminarily to him is not evidence that it is compelled to
do so. The wisdom of doing this, except in cases where the
insurer demands the correction of defects of title before -
issuing its policy, is not apparent. Under such a hypothesis,
it could be said that in every insurance transaction of what-
soever type, the insurer is the agent of the insured. Much
more reasonable would be a holding the reverse of this con-
tention. Although the question did not receive extended
consideration, nevertheless, in the case of Mayhew v. Melby,

a a + 63T

“206 Cal. 896, 400 [274 Pace. 517], we used the following
language:

“Defendants also contend that the judgment should be
reversed for the refusal of the court below to admit in
evidence a policy of title insurance .. . issued to plaintiff,
which stated that her title was subject to the Melby con-
tract. But said policy could not have been received by her
until after her deed had been recorded. Said title insurance
company was not the agent of plaintiff, and any knowledge
it may have possessed as to the condition of the title was
not imputable to plaintiff.’’

HJ Moreover, if an agency was here conferred upon the
title company, it was to search only for matters properly of
record, as noted in the above quotation from the escrow
agreement. (Bothin v. California T. I. Co., 153 Cal. 718,
722 [96 Pac. 500, Ann, Cas, 1914D, 634].) Anything
learned about matters not affecting the record title would
not in any event be imputed to the principal. If the in-
strument in question was not properly of record, the title
company on its own account, or as agent, had no duty to
perform respecting it. As said in the case of Bogart
v. George K. Porter Co., 193 Cal. 197, 210 [223 Pac. 959,
31 A. L. R. 1045]: ‘The rule invoked by counsel is sub-
ject to the qualification that ‘knowledge possessed by an
agent while he occupies that relation and is executing the
authority conferred upon him as to matters within the scope
of his authority, is notice to his principal, although such
knowlédge may have been acquired before the agency was
created, if it appears that such knowledge was present in
his mind at the time he acted for the principal’.’? See,
also, Cooke v. Mesmer, 164 Cal. 332 [128 Pace. 917];
Christie v. Sherwood, 113 Cal. 526 [45 Pac. 820].

The findings to the effect that the document was properly’
recorded and that defendant mortgage company had knowl-
edge of its contents are therefore unsupported by the evi-
dence, .

The judgment is reversed and the cause is remanded for
further proceedings within the limits here imposed.

Curtis, J., Shenk, J., and Waste, C. J., concurred,

2S

[L. A. No, 14455, In Bank—April 80, 1984.]

DEPARTMENT OF WATER AND POWER OF THE
CITY OF LOS ANGELES (a Municipal Corporation),
Petitioner, v. INDUSTRIAL ACCIDENT COMMIS-
SION and LILLIA HE. WINKLER et al., Respondents.

Ray L. Chesebro, City Attorney, J. M. Stevens, Assistant
City Attorney, and Fairfax Cosby, Deputy City Attorney,
for Petitioner.

Everett A. Corten for Respondents.

CURTIS, J.—This proceeding was instituted to annul an
award of the Industrial Accident Commission in favor of

SS «::

Lillia E. Winkler, the surviving widow of Mark A. Winkler,
who met his death while operating a Diesel gasoline power
shovel owned by the Mono Construction Company, which at
the time of Winkler’s injury was rented to the Department
of Water and Power of the City of Los Angeles under a
written contract between the said construction company with
said department. The award was against the Department
of Water and Power and the National Automobile Insur-
ance Company, the insurance carrier of the Mono Construc-
tion Company. The Department of Water and Power was
self-insured with respect to liability imposed by the Work-
men’s Compensation Act. The commission found that the
deceased while employed as a gasoline shovel operator on No-
vember 4, 1932, by L. M. Post and R. D. Cavalery, a copart-
nership, doing business as Mono Construction Company, his
general employer, and Department of Water and Power of
the City of Los Angeles, his special employer, sustained in-
jury arising out of and occurring in the course of his employ-
ment when he was struck by a fall of earth, the injury proxi-
mately causing his death on the same day. It also found
that at said time the Mono Construction Company’s insur-
ance carrier was the National Automobile Insurance Com-
pany and that the Department of Water and Power of the
City of Los Angeles was self-insured.

The petitioner herein is the Department of Water and
Power of the City of Los Angeles and seeks to annul the
award of the commission based upon said finding against
said Department of Water and Power upon the ground that
the evidence is insufficient to sustain the finding of the com-
mission that said Department of Water and Power was the
special employer of Winkler at the time of the death of the
latter.

HI The evidence before the commission showed that
Mark A, Winkler was employed by the Mono Construction
Company, a copartnership consisting of L. M. Post and
R. D. Cavalery. While so employed the Mono Construction
Company, hereinafter referred to as the Construction Com-
pany, entered into a written agreement with the Department
of Water and Power of the City of Los Angeles, hereinafter
referred to as the Department, whereby the said Construc-
tion Company agreed for a certain fixed sum to furnish a
certain number of Diesel shovels, with operators and helpers

6) rs

to the Department to do construction work in the building
of a road in Bouquet Canyon in the county of Los Angeles,
where the Department was about to construct a large dam.
In pursuance of said written agreement, the Construction
Company furnished and placed at the disposal of the De-
partment a number of Diesel shovels with the said Mark A.
Winkler as an operator of one of said shovels. The shovel
was operated by Winkler under the direction of a foreman
in the employ of the Department. Just prior to the injury
‘Winkler was operating the shovel along the general route
marked out by the engineer of the Department. At that
time a foreman of the Department was directing the opera-
tion of the shovel, and directed Winkler to move the shovel
to the other side of the canyon in which the work was being
done and near to the side of a hill along said route. This
was done, and after the shovel had been operated near this
embankment for about three hours, the hill caved in, caus-
ing the injuries to Winkler from which he died. The writ-
ten contract under which the Construction Company fur-
nished the shovels, operators and helpers to the Department
prescribed certain rules to be followed by the employees of
the Construction Company in the operation of the shovels
and expressly provided that any operator or helper, so em-
ployed, who failed or refused to comply with said rules, ‘‘or
who refused to cooperate with the forces of the City’’ should
be discharged immediately and should not again be employed
on the work. Other facts were brought out at the hearing
before the commission which showed that the Department
exercised to a substantial extent actual control over the
employees operating the shovels after their delivery to the
Department, but those already recited above are sufficient
in our opinion to justify the commission in finding that the
Department was the special employer of Winkler at the
time he suffered the injury which caused his death.

HM This case we think is controlled by the principles
announced in the leading case of Employers’ Liability Assur.
Corp. v. Industrial Acc. Com., 179 Cal. 482 [177 Pac. 278].
In that case, the Riverside Portland Cement Company
planned to install new machinery and to re-arrange its plant.
Tt arranged with the Wellman-Lewis Company, a copartner-
ship engaged in the business of installing large machinery,

Se

for the Wellman-Lewis Company to furnish to the cement
company a number of employees under a foreman also em-
ployed by the Wellman-Lewis Company. The Riverside
Portland Cement Company was to furnish all materials
and was to, and did in fact, give and exercise direction and
control of such employees, including said foreman. While
performing work under this agreement upon the plant of
the Riverside Portland Cement Company, one of the em-
ployees furnished by the Wellman-Lewis Company sustained.
an injury which resulted in his death. The court held that
at the time of said injury, Wellman-Lewis Company was
the general employer and the Riverside Portland Cement
Company was the special employer of the injured employee,
and affirmed an award against the insurance carrier of each
of these companies in favor of the surviving widow of said
injured employee. In its decision the court announced the
following principle of law (p. 489): ‘Where, at the time
of the accident, both the general and special employer ex-
erted some measure of control over the injured person
through their respective foreman and employee, both should
be held liable.’”? In its opinion the court cites as authority
and follows the case of De Noyer v. Cavanaugh, 221 N. Y.
273 [116 N. E. 992]. The case of Employers’, Liability
Assur. Corp. v. Industrial Ace. Com., supra, has in turn
been cited with approval in the following decisions of the
court: Federal Mut. Liability Ins. Co. v. Industrial Acc.
Com., 190 Cal. 97, 103 [210 Pac. 628]; Famous Players
Lasky Corp. v. Industrial Acc. Com., 194 Cal. 184, 187 [228
Pac. 5, 84 A. L. R. 765]; Diamond Drill Contracting Co. v.
Industrial Acc. Com. 199 Cal. 694, 697 [250 Pac. 862];
Independence Indemnity Co. v. Industrial Acc. Com., 208
Cal. 51, 55 [262 Pac. 757]; Umsted v. Scofield Hng. Const.
Co., 203 Cal. 224, 227 [263 Pac. 799].° In this last-cited
case the court stated the law as follows (p. 227): ‘‘As such
workmen may under the common law of master and servant
look to the general employer for wages and to the special
employer for damages for negligent injuries, so under the
‘Workmen’s Compensation Law they may, so far as its pro-
visions are applicable, look to the one or to the other, or to
both, for compensation for injuries due to occupational
hazards.’’
a

1, es

These authorities unequivocally sustain the action of the
commission in awarding compensation against petitioner.
The award is therefore affirmed.

Langdon, J., Shenk, J., Preston, J., and Waste, C. J., con-
curred. :

[L. A. No. 14566, In Bank.—April 30, 1934]

NATIONAL AUTOMOBILE INSURANCE COMPANY (a
Corporation), Petitioner, v. INDUSTRIAL ACOCI-
DENT COMMISSION, LILLIA E. WINKLER et al.,
Respondents.

F. Britton McConnell for Petitioner.

Arthur I. Townsend and Everett A. Corten for Respond-
ents.

CURTIS, J.—This is a companion case to that of Depart-
ment of Water and Power v. Industrial Acc. Com., No.
14455, this day decided (ante, p. 638 [32 Pac, (2d) 354]).
The petitioner herein, the National Automobile Insurance
Company, was found by the Industrial Accident Commission
to be the insurance carrier of the Mono Construction Com-
pany, at the time the employee, Winkler, met his death
while operating a gasoline power shovel belonging to said
construction company, which shovel with its operator and

|

6,

helper had been rented to the Department of Water and
Power of the City of Los Angeles by the Construction Com-
pany. An award of compensation was, therefore, made
against the National Automobile Insurance Company, as the
insurance carrier of the Mono Construction Company, as
well as against the Department of Water and Power under
the findings of the commission that the Mono Construction
Company was the general employer and the Department of
‘Water and Power was the special employer of the deceased
employee at the time of his injury.

The National Automobile Insurance Company seeks to set
aside said award on the ground that the evidence before
the commission was insufficient to show that the deceased at
the time of his injury was in the employ of Mono Construc-
tion Company or that the National Automobile Insurance
Company was the insurance carrier of the construction com-
pany at the time of the injury to said deceased.

Hl Im addition to the facts set forth in the opinion in
the case of Department of Water and Power v. Industrial
Acc. Com., swpra, it appears without contradiction that the
Mono Construction Company, not only employed the de-
ceased and paid him his wages, but that at all times he was
subject to certain orders of the construction company, and
that the company had authority to discharge him at any
time it was dissatisfied with his work. It further appears
that Mr. Post of the construction company paid daily visits
to the job, spending there almost the entire time of each day
and keeping a general oversight over the operation of the
shovels in charge of its employees. These facts were suffi-
cient to support the finding of the commission that the Mono
Construction Company as the gencral employer of the ‘de-
ceased retained and exercised some measure of control over
Winkler at the time of his injury, and justified the conclu-
sion of the commission that the construction company was
liable to the decedent’s surviving widow for compensation
resulting from his death. The supporting authorities cited
in the companion case of Department of Water and Power v.
Industrial Acc. Com., supra, furnish legal justification for
the action of the commission in awarding compensation to
said surviving widow under both the general and special
employment of her deceased husband, and it is not necessary
to restate them here.

SS

The further question presented on this appeal is
embodied in the contention of petitioner that the evidence
before the commission was insufficient to support its finding
that petitioner, the National Automobile Insurance Com-
pany, was the insurance carrier of the Mono Construction
Company with respect to the injury and death of the de-
ceased employee. In the first place it is contended by peti-
tioner that its liability under the policy of insurance is
limited to the specific location named in a rider or indorse-
ment attached to the policy. This rider reads as follows:
‘The insurance hereunder is limited as follows: It is agreed
that, anything in this policy to the contrary notwithstand-
ing, this policy DOES NOT INSURE: As respects injuries
(or death resulting therefrom) sustained by any employees
engaged in any operations other than those operations spe-
cifically rated and described as covered hereunder in the
Classification of Operations schedule herein and that this
policy shall only cover such operations of this Employer
which are performed upon the following described premises
or directly in connection with such operations:—1427 North
Sycamore, Hollywood, California.’’ It will be noted that
the policy of insurance purports to limit the activities of
the construction company to a specific location and to cer-
tain specified operations. These operations, ag set forth in
the body of the policy under the heading of ‘Classification
of Operations’? were as follows: ‘‘“Truckmen (N.O.C.).
Payroll to include Drivers, Chauffeurs and their Helpers,
Stablemen, Blacksmith and Repairmen, excluding only Cleri-
eal Office and Storage Warehouse Employees.’’ The evidence
shows that the address given in the rider was that of the
employer, the Mono Construction Company’s office, and from
whence it carried on its business. The contention that it is
not liable for the death of the deceased because his injury
was sustained at a location other than that specified in the
rider is without merit as it is apparent that the location
given in the rider attached to the policy was only intended
to designate the employer’s place of business, and did not
limit the liability of the insurer to injuries sustained at that
particular location. This is made apparent by the ‘‘Classifi-
eation of Operations’’ wherein the operation insured against
is given as that of ‘‘Truckmen, ete.’’ If, assuming for the
time being, as contended by petitioner, the policy is limited

rr

to injuries sustained by the employer while engaged in the
trucking business, it is apparent that while its office or prin-
cipal place of business is designated to be at a particular
location, its operations necessarily extend far beyond that
locality and into and over other and distant locations. It
would be impossible for an employer to carry on a trucking
business by housing his trucks upon his premises and keep-
ing them there continually. The very nature of such a busi-
ness contemplates that the trucks, or other vehicles used
therein, shall be sent from place to place as the business
requires, and away from and beyond the location where they
are kept when not in use. We agree with counsel for re-
spondents that it would be absurd to hold that the policy
of insurance limited the activities of the employer to the
location given therein, which, as we have seen, the evidence
shows is merely the office or principal place of business of the
employer.

HJ The further claim of the petitioner that its liability
under the policy of insurance is limited to injuries sus-
tained by its employees in the declaration of ‘‘ Classification
of Operations’’ specified in the policy of insurance, and that
the ‘‘Classification of Operations’’ mentions simply, ‘‘Truck-
men’’, including drivers, chauffeurs and their helpers, etc.,
presents a problem much more difficult of solution. The peti-
tioner claims that its liability under the policy was limited
to injuries sustained by employees of the construction com-
pany while engaged in an occupation within the terms of the
policy and that the policy covers only ‘‘Truckmen”’, includ-
ing drivers, chauffeurs, and their helpers, etc., and that as
the deceased was injured while operating a gasoline power
shovel, he was not at that time engaged in any occupation
covered by the policy of insurance issued by petitioner.

The evidence before the commission showed, and that
body found, that ‘‘Mark A. Winkler, deceased, while em-
ployed as a gasoline power shovel operator’’, sustained in-
juries arising out of and occurring in the course of his em-
ployment causing his death. While there is some evidence
to the effect that the deceased during his employment by the
Construction Company drove at times a truck for his em- .
ployers, it is apparent that that service was only incidental
to his regular employment as an operator of a gasoline
propelled shovel. The evidence furthermore shows that at

SS

the time he received his fatal injuries he was so employed.
That there is but slight, if any, similarity between an ordi-
nary truck and a gasoline shovel must be conceded. The
operations and uses of the two machines are entirely differ-
ent. It is not necessary here to describe either the operation
or use of either of these instrumentalities, as they are mat-
ters of common knowledge. The two machines bear no
resemblance to each other, and the term, truck, cannot by
any stretch of construction be extended to include or em-
brace a gasoline shovel. Therefore, when the policy of in-
surance issued by petitioner limited its liability to injuries
sustained by an employee engaged in the operation of a
truck, can the insurance carrier be held for the death of an
employee injured while operating a gasoline shovel?

In the case of Worswick Street Paving Co. v. Industrial
Acc. Com., 181 Cal. 550 [185 Pac. 953], it was held that
an insurance policy issued by an indemnity company to a
street paving company did not cover liability for the death
of a laborer in the employ of a paving company while
engaged in trench excavation work, where the policy con-
tained a proviso expressly excepting the work of construct-
ing sewers. The court held that the ‘‘trench excavation’’ or
eonduit upon which the employee was working at the time
of his injury was a sewer, and as work in the construction
of a sewer was expressly excepted from the policy the insur-
ance carrier was not liable for the injury of the employee
sustained while working on said trench excavation. While
there is no exception in the policy of insurance issued by
the petitioner herein, excluding the work of operating a
gasoline shovel, said policy of insurance contained no pro-
vision which expressly or by implication fixed liability upon
the insurance carrier for an injury to an employee sus-
tained while operating a gasoline shovel. The effect of the
decision in Worswick v. Industrial Acc. Com., supra, is that
an insurance carrier cannot be held liable for an injury not
covered by the terms of the policy of insurance. As we
have seen, the facts in this case are that the policy issued
by the petitioner covered truckmen, including drivers, etc.,
and made no mention directly or indirectly of any other
elass of employees. It cannot, therefore, be construed as
rendering the carrier liable for any injury sustained by an
employee while engaged in operating a gasoline shovel or

6:5

in any other line of employment, other than that set forth
in the policy of insurance.

In the ease of Pacific Coast Cas. Co. v. Industrial Acc.
Com., 176 Cal. 24, 25 and 26 [167 Pac. 589], an award
was made against the insurance carrier, the petitioner in
said proceeding, for injuries sustained by the superintendent
of a mine operated by the insured, which caused the death
of said superintendent. In the course of the opinion the
court said: ‘‘It seems perfectly clear that the occupation of
mine superintendent is not included within any employment
specifically designated in the stipulation, The respondents
do not, indeed, dispute that. But it is argued that the
policy itself, a copy of which is attached to the return, was
intended to have a broader scope, and to cover the superin-
tendent, as well as the miners performing manual labor in
the mine. But... we think the policy itself was clearly
intended to cover only employees engaged in the specified
employments.’’? The court therefore held (p. 27): ‘It is ap-
parent, therefore, that the premium for which the Casualty
Company undertook to insure the Mining Company was
based upon the pay received by the specified employces.
The fair construction of the policy is that which the parties
adopted when they made -their stipulation of facts, namely,
that the insurance was designed to cover employees of the
designated classes, they being the ones whose compensation
furnished the measure of the premium, in consideration of
which the Casualty Company assumed the risk.’”? The
court accordingly annulled the award against the Casualty
Company. The stipulation referred to by the court in its
opinion was that the Mining Company had a ‘‘Workmen’s
Compensation policy with the Pacifie Coast Casualty Com-
pany covering the employees operating its mining properties
at Coulterville covering miners, hoistmen, surface trainmen,
timekeeper and roustabout, millmen, blacksmith and helper,
and cook and waiter’”’, In that case the court refused to
extend the terms of the policy to cover the superintendent
of the mine, although he was one of the employees of the
company in its operation of the mine. Here, we are asked
to extend the terms of the policy to an employee who was
not mentioned in the policy and who was engaged in an
entirely different and distinct line of employment from
those specified therein. That this cannot be done we think

SS 2

is clear from the authorities above cited, as well as from the
following: Western Indemnity Co. v. Industrial Acc. Com.,
43 Cal. App. 487 [185 Pac. 306]; Kugler v. Industrial Acc.
Com., 63 Cal. App. 808 [218 Pac. 472]; Ocean A. & G.
Corp., Lid., v. Industrial Acc. Com., 104 Cal. App. 34 [285
Pae. 707].

The respondent relies upon the case of Ocean etc. Corp.,
Lid., v. Industrial Acc. Com. 194 Cal. 127 [228 Pac. 1], in
support of the award against the insurance carrier. Re-
spondent contends that this court in that case held that a
description contained in the declaration of ‘‘ Classification of
Operations’’ is to be taken not as limiting the list of opera- -
tions in which the insured might engage, but only as fixing
a premium rate applicable to the particular operations de-
scribed therein, and even though the insured was engaged
at the time of the injury in work outside the terms and
limitations expressed in said declaration of ‘Classification
of Operations’’, the effect was not to take the employer or
employee outside the protection of the policy, but was only
to require the employer to pay a different or additional
premium than that provided for the particular employments
specified in said declaration. We do not construe the de-
cision in that cage as laying down a general rule to that
effect, which would be applicable to all policies of compensa-
tion insurance. The court in construing the particular
policy which was then before it, held that, due to the par-
ticular provisions of that policy of insurance, the declara-
tion of ‘‘Classification of Operations’’ did not fix the list of
operations which were insured against by the policy. The
court called particular attention to a provision in the policy
which by its terms purported to extend the list of operations
to other employments not mentioned in the declaration of
“Classification of Operations’. This provision reads as fol-
lows: “If any operations as above defined are undertaken
by this employer but are not described or rated in said
Declaration, this employer agrees to pay the premium
thereon, at the time of the final adjustment of the premiums
in accordance with Condition C hereof, at the rates and in
compliance with the rules of the Manual of Rates in use by
the Company upon the date of the issue of this policy.’’
Basing its conclusion upon this provision of the policy, as
well as others referred to in the opinion, the court held that

0

under that particular policy the list of operations covered
by the policy was not limited to the declaration of ‘‘Classi-
fication of Operations’’, No provision, like or similar to
the one just quoted, is to be found in the policy of insur-
ance issued by the petitioner. [JJ On the other hand,
there is to be found in the present policy the following
stipulation: ‘“‘The foregoing enumeration and description
of employees include all persons employed in the service of
this Employer in connection with the business operations
above described to whom remuneration of any nature in
consideration of service is paid, allowed or due, together
with an estimate for the Policy Period of all such remunera-
tion.’’ The effect of this stipulation in the policy is not to
extend the list of operations set forth in the ‘‘Classification
of Operations’’, but on the other hand, it specifically states
that the employees enumerated therein include all persons
in the service of the employer in connection with its said
business operations to whom remuneration is paid. Re-
spondent places some reliance upon the further stipulation
in the policy reading as follows: ‘‘The foregoing estimates of
remuneration are offered for the purpose of computing the
advance premium. The Company shall be permitted to
examine the books of this Employer at any time during the
Policy Period and any extension thereof and within one
year after its final termination so far as they relate to the
remuneration earned by any employee of this Employer
while the Policy was in force.’? We fail to see that this
stipulation helps the respondent’s position. The ‘‘estimate
of remuneration’’ mentioned therein refers to remuneration
of the employees set forth in the ‘‘Classification of Opera-
tions’? which, as we have seen, were truckmen, ete. The
policy was to continue for a year. It would be, of course,
impossible at the beginning of this period to do more than
estimate the remuneration of said employees during the
whole year, and this provision of the policy simply gives to
the insurance carrier the right to examine the books of the
insured during that period and for a year thereafter to
ascertain the true amount of remuneration paid said em-
ployees. It does not in any way purport to extend the
coverage provisions of the policy to any employees of the
insured not included in the declaration of ‘‘Classification of
Operations’’,

SS

Even should we concede that in the body of the
policy of insurance issued by petitioner are to be found
certain provisions which might form the basis of an argument
that would bring this case within the doctrine announced by
this court in the case of Ocean etc. Corp., Lid., v. Industrial
Ace. Com., supra, although in our opinion it would be most
difficult to successfully sustain such argument, yet such pro-
visions if so construed would be inconsistent with the provi-
sions of the indorsement or rider attached to the policy and
quoted above, wherein it is expressly provided as follows: ‘‘It
is agreed that, anything in this policy to the contrary not-
withstanding, this policy DOES NOT INSURE: As respects
injuries (or death resulting therefrom) sustained by any
employees engaged in any operations other than those opera-
tions specifically rated and deseribed as covered hereunder
in the Classification of Operations schedule herein.”? As
we have seen, the ‘‘Classification of Operations’? included
only, ‘“‘Truekmen. Payroll to include Drivers, Chauffeurs,
and their helpers, Stablemen, Blacksmiths and Repairmen.”’
Here is a positive and clear statement that the policy does
not cover an employee sustaining an injury while engaged
in any operation not rated and described in the ‘‘Classifica-
tion of Operations’. This statement, as we have seen, is
contained in the indorsement or rider to the main policy.
It therefore controls any provision in the policy inconsistent
therewith. (Cooley’s Briefs on Insurance, vol. 8, p. 1009;
Royal Ins. Co. v. Caledonian Ins. Co., 182 Cal. 219, 223
[187 Pac. 748] ; 14 Cal. Jur., p. 451; Aetna Ins. Co. v. Sacra-
mento Stockton 8. S. Co., 273 Fed. 55; Jackson v. British
American Assur. Co., 106 Mich. 47 [63 N. W. 899, 80
L. RB. A. 636].)

The policy of insurance issued by the petitioner must be
construed as applying only to those employees of the in-
sured named in the declaration of ‘‘Classification of Opera-
tions”’ set out in the policy. The wages or remuneration
of these employees formed the entire basis upon which the
premium paid to the insurance carrier was computed. It
had no right to collect premiums based upon the wages
paid to any other employees not named in said declaration
of ‘Classification of Operations’’, It should not, there-
fore, be held liable for any injury sustained by any such
employee.

652 [|

That compensation insurance policies may be limited
to certain specified employees of the insured is now definitely
established by statute (Workmen’s Compensation Act, sec.
81 [a]), and has received the approval of the courts.
(Zurich Gen. Acc. etc. Ins. Co. v. Stadelman, 208 Cal. 151
[280 Pac. 687] ; Ocean A. & G. Corp., Ltd., v. Industrial Acc.
Com., 208 Cal. 157 [280 Pae. 690].)

As the deceased at the time of his injury was not within
the coverage provisions of the policy of insurance issued by
the petitioner, the award against petitioner and in favor
of the surviving widow of the deceased cannot be sustained.
In so far as said award is made to run against the petitioner,
it is hereby annulled.

Langdon, J., Shenk, J., Preston, J., and Waste, .C. J.,

concurred.

[L. A, No. 12510, In Bank—April 80, 1984.]

KATE C. TROUT, Appellant, v. R. H. TAYLOR et al,
Respondents.

[L. A. No. 12574, In Bank.—April 80, 1984.]

KATE ©. TROUT, Respondent, v. R. H. TAYLOR et al.,
Defendants; R. P. ARCHER, Appellant.

Meserve, Mumper, Hughes & Robertson for Appellant
Trout.

Tobias R. Archer for Appellant R. P. Archer,

Sherman & Sherman and Austin C. Sherman for Respond-
ents R. H. Taylor et al.

THE COURT.—A hearing was granted in this case, on
petitions of both plaintiff and defendant Archer, after de-
cision by the District Court of Appeal, Fourth Appellate
District. We now adopt, as part of our decision, the follow-
ing portions of the opinion rendered therein by Mr. Justice
pro tem. Morton.

“Plaintiff, an elderly woman, without business experi-
ence, and of very limited schooling and education, was in-
duced by an agent of R. H. Taylor Corporation on April
18, 1927, to exchange her two acres located in Sawtelle, Los
Angeles county, of a reasonable market value of $12,500, for
110 shares of Running Springs Park, Inc., having property
in San Bernardino county. This stock was represented to
her as having a value of $30,000 and she was assured that
it would pay her $5,000 every six months commencing Sep-
tember 1, 1927, and until she had received $30,000. The

654 PC |

stock was in fact of no value whatever and paid no returns.
The deed signed and acknowledged by plaintiff to her lots
was in blank as to a grantee which was not discovered by her
at the time. Subsequently the names of A. H. Taylor and
Mae Taylor were inserted as grantees pursuant to certain
alleged transactions with the R. H. Taylor Corporation, Inc.
After recording the deed a trust deed was placed on lot 1
securing a promissory note for $4,000 in favor of the notary
who took the acknowledgment of plaintiff’s deed, and a trust
deed was placed on lot 2 securing a promissory note for
$3,000 in favor of the agent who induced plaintiff to enter
into the deal. Both notes were sold to defendant R. P.
Archer for $6,660. A. H. Taylor and wife defaulted on
the $4,000 note secured by a trust deed on lot 1 and at the
foreclosure sale defendant R. P. Archer bid in the property.
They paid off the $3,000 note secured by the trust deed on
lot 2 and thereafter executed a new note for $2,500 payable
to L. E. Arnold secured by a trust deed on this lot. Since
bidding in lot 1 defendant Archer has expended for assess-
ments and taxes $521.51. On November 5, 1928, plaintiff
served notice of rescission; she did not discover, however,
that the deed executed by her was in blank until the taking
of the deposition of R. H. Taylor on March 23, 1929. The
trial court decreed the deed executed by plaintiff to be null
and void and cancelled and held that no interest or title
passed thereby. Defendant R. P. Archer was adjudged to
be entitled in equity to the return of his $521.51, together
with interest and also $4,611.16 with interest at 7 per cent
from June 23, 1928, that being the. amount due at the fore-
closure sale of that date. To secure the payment of these
amounts defendant R. P. Archer was awarded a lien against
lot 1. Defendant L. EH. Arnold was declared by the judg-
ment to have a lien on lot 2 in the sum of $2,500, together
with interest, less any amounts paid to him on principal or
interest. Plaintiff is willing to repay to defendant Archer
the $521.51 together with interest but appeals on the judg-
ment roll from the Archer judgment for $4,611.16 with 7 per
cent interest from June 23, 1928, and also the Arnold judg-
ment of $2,500 plus interest. The court found that R. P.
Archer and L. B. Arnold acted in good faith and relied
on the record title. Because the grant deed to A. H. Taylor
and wife was a nullity, plaintiff contends that neither R. P.

a De 655

Archer nor L. E. Arnold acquired any title or lien on the
property even though they acted in good faith, without
knowledge of the fraud perpetrated, and relied on the record
title. Instead of giving plaintiff judgment against all the
defendants except Archer and Arnold for the amounts evi-
denced by the trust deeds, plaintiff maintains that this judg-
ment should be in favor of Archer and Arnold and plain-
tiff’s property decreed free of the two liens.

“Defendant Archer claiming to be an innocent purchaser
files a separate appeal from the judgment denying his title
to lot 1 and allowing him only a lien thereon. In this appeal
the clerk’s and reporter’s transcripts bring before us the
entire evidence. The two appeals have been consolidated
and therefore they will be considered jointly here.

“The fraud of the defendants excluding Archer and Ar-
nold has not been challenged so we turn our attention at once
to the law of this state dealing with deeds executed in
blank. In Jones v. Coulter, 75 Cal. App. 540, at page 547
[243 Pac. 487], the court held:

“«<There can be no doubt as to the utter invalidity of the
instruments under which appellant’s grantor, Meng, de-
raigned his purported title. The blank deeds signed by re-
spondent and subsequently filled out under Neilson’s direc-
tion, with Meng’s. name inserted as the purported grantee,
were mere nullities. According to the great weight of au-
thority, a deed executed in blank is void and passes no title.
(Wunderlin v. Cadogan, 50 Cal. 618, and cases cited infra.)
As was said in Whitaker v. Miller, 83 Ill. 381, ‘‘there must
be, in every grant, a grantor, a grantee and a thing granted,
and a deed wanting in either essential is absolutely void’’.
In the instant case each of the instruments signed by re-
spondent was wanting in all three of these essentials to a
valid deed. Though the decisions of other jurisdictions are
not in entire harmony upon the question, it has been defi-
nitely decided in this state that under our statute of frauds
the name of the grantor or grantee or a description of the
property cannot be inserted by an agent for the grantor, in
the absence of the latter, unless the agent’s authority be in
writing. If the authority of the agent be not in writing, his
insertion of the name of grantor or grantee or description
of the property does not pass the title. (Upton v. Archer,
41 Cal. 85 [10 Am. Rep. 266]; Vaca Valley etc. R. RB.

656 be Ye

y. Mansfield, swpra [84 Cal. 560 (24 Pac. 145)]; Harris v.
Barlow, 180 Cal. 142 [179 Pac, 682]. See, also, Lund v.
Thackery, 18 S. D. 118 [99 N. W. 856].) In Upton v.
Archer, supra, the court says: ‘‘ ... as it could not become
the plaintiff’s deed until the name of a grantee was inserted,
that act could not be performed by an agent, in the absence
of the plaintiff, unless his authority was in writing’’’.
(Videau v. Griffin et al., 21 Cal. 390, 392; Tannahill v.
Greening, 85 Cal. App. 714 [259 Pac. 1017]; Bardin v.
Grace, 167 Ala. 453 [52 So, 425, Ann. Cas. 1912A, 537].)

“In view of these authorities the conclusion is ines-
eapable that the deed in question was not voidable but was
void in toto, a nullity. The record shows no agency, and
no authority, express or implied given by plaintiff to defend-
ant R. H. Taylor. The findings state that she believed the
name of R. H. Taylor Corporation as grantee was written
in the deed when she signed and acknowledged it and that
she was not aware it was blank as to the grantee. The
question of agency is therefore not involved.”

The trial court, as stated above, adjudged title to the
properties to be in the plaintiff, subject to liens of the two
parties who lent money thereon in good faith, to the extent
of their expenditures. Defendant Archer objects to this
determination of his rights, and claims full title as a bona
fide purchaser, to the land which he bought at the fore-
closure sale. Plaintiff attacks this position and objects to
any payments save for the sums expended for taxes, ete.

Numerous authorities have established the rule that
an instrument wholly void, such as an undelivered deed, a
forged instrument, or a deed in blank, cannot be made the
foundation of a good title, even under the equitable doctrine
of bona fide purchase. (Promis v. Duke, 208 Cal. 420 [281
Pac, 613]; Gould v. Wise, 97 Cal. 532 [82 Pac. 576, 83 Pac.
823]; Bardin v. Grace, supra.) Consequently, the fact that
defendant Archer acted in good faith in dealing with persons
who apparently held legal title, is not in itself sufficient
basis for relief. | | An innocent purchaser taking a void
instrument can, however, find protection in the doctrine of
estoppel, where circumstances are presented which establish
negligence or some other misconduct by the other party,
which contributed to the loss. Section 3543 of the Civil
Code provides broadly that ‘‘where one of two innocent per-

Ss

sons must suffer by the act of a third, he, by whose negli-
gence it happened, must be the sufferer’’.

In this connection the court failed to find any negligence
on the part of plaintiff, and in fact, expressly found that
“it is not true that plaintiff ought now to be estopped to
urge said claims against defendant R. P. Archer, or against
defendant L. E, Arnold, and it is not true that plaintiff
was guilty of gross laches, or any laches’. There is no
evidence in the record to warrant a different finding. The
loss resulting from the fraud must fall, therefore, where
the course of business has placed it. (Security Mortgage
Co. v. Delfs, 47 Cal. App. 599 [191 Pac. 58]; Gould v. Wise,
swpra.) Defendants Archer and Arnold must seek their
recourse against the fraudulent defendants who occasioned
the loss.

The judgment is therefore reversed with directions to the
trial court to enter judgment in accordance with the views
expressed in this opinion,

[Sac No. 4545. In Bank—April 30, 1934.]

D. W. COZAD, Plaintiff and Appellant; GUY LeROY
STEVICK, Assignee, etc., Appellant, v. RAISCH IM-
PROVEMENT COMPANY (a Corporation), Respond-
ent; FIDELITY AND DEPOSIT COMPANY OF
MARYLAND, Appellant.

658

Alfred CO. Skaife, Edwin H. Williams and A. S. Hutchin-
son for Appellants.

A. B. Weiler and Herbert Choynski for Respondent.

THE COURT.—In October, 1918, D. W. Cozad recovered
a judgment against defendant Raisch Improvement Com-
pany in the sum of $5,898.95 and costs, which judgment
was affirmed on appeal. Fidelity and Deposit Company of
Maryland had issued a policy of employer’s liability insur-
ance in favor of said defendant in the sum of $5,000, and
hence was liable in that amount. The said insurance com-
pany also executed an undertaking to stay execution on the
defendant’s appeal. Upon affirmance, it paid the amount
for which it was liable on the insurance policy, i. e., $5,000
and costs and interest, the total amounting to $7,016.93. De-
fendant Raisch Improvement Company was liable for the
balance of the judgment, $898.95, and promised to pay the
same. Upon its failure to do so the insurance company paid
the balance, and took an assignment of the judgment in

es!

favor of Guy LeRoy Stevick, for its benefit. He proceeded
to levy execution against the defendant on said judgment,
which execution was, upon defendant’s motion, later recalled
and quashed. This appeal is by Fidelity and Deposit Com-
pany of Maryland from the order quashing execution.

The position of appellant is that it occupied two
distinct relations with respect to defendant, one as insurer
to the extent of the $5,000 liability on its policy; and the
other, as surety on an undertaking on appeal. Having paid
the amount of the policy, it discharged its liability as in-
surer. The liability it assumed under the bond to stay
execution, however, made it responsible for the full amount
of the judgment subsequently affirmed, but with the right of
subrogation against the defendant. (See Code Civ. Proc.,
see. 1059.) Normally, when it paid the balance of the judg-
ment and took an assignment thereof, it could proceed
against the defendant to recover the same.

| | Defendant seeks to escape from this rule, and avoid
liability for the balance of the judgment, on the ground
that at the time the surety paid the same, it was not bound
to do so, and acted as a volunteer. This contention is based
upon the following circumstances: The insurance company
paid the sum for which it was liable under the policy on
September 29, 1917, and on that date, the attorney for the
plaintiff in the action caused to be entered in the judgment-
book a satisfaction of judgment ‘‘in full as against the
Fidelity and Deposit Company of Maryland, by payment of
$7,016.93’. Defendant’s position would compel the con-
clusion that plaintiff’s attorney deliberately satisfied a judg-
ment against a corporate surety on an undertaking on appeal
for less than the amount of the judgment. This conclusion
is unreasonable, and is inconsistent with the subsequent acts
of the parties, particularly the act of the surety in paying
the balance itself, in spite of the above language. The fact
that on its face the amount received was less than the
amount of the judgment serves as further evidence that
the satisfaction was not as to the whole of the judgment, but
merely as to the whole of the liability of the Fidelity Com-
pany as insurer under the policy. Moreover, the evidence
of plaintiff’s attorney, contained in an affidavit in the record,
corroborates this view, namely, that the satisfaction was par-
tial only, to the extent of $7,016.93, and that if the surety

60

were compelled to pay the balance, it was agreed that the
plaintiff would make an assignment of the judgment to it.”
We are satisfied that the intent of the parties in making the
above entry was to satisfy the judgment in full against
Fidelity and Deposit Company as insurer under the em-
ployer’s liability policy, and that there was no intent to
release it from its undertaking on appeal, which was a sepa-
rate and distinct liability for the whole of the judgment in
the event that the defendant failed to pay it. Under this
view, the surety was not a volunteer and is entitled to re-
cover from defendant.

HB Some question is also made as to the failure of the
surety to file notice and claim of contribution with the clerk
of the court within ten days after payment of the balance
of the judgment, as provided in section 709 of the Code of
Civil Procedure. This section relates to sureties generally,
while section 1059 of the same code deals specifically with
the rights of a surety on an undertaking on appeal, and on
principle and authority the specific section must control the
general. The procedure followed by appellant was in con-
formity with the provisions of section 1059, and was a
proper method of enforcing its subrogation right.

The order quashing execution is reversed.

[L. A, No. 18744, In Bank—April 30, 1934,]

THIRD AND BROADWAY BUILDING CO. (a Corpora-
tion) et al, Respondents, v. COUNTY OF LOS AN-
GELES, Appellant.

Everett W. Mattoon, County Counsel, and Gordon Boller,
Deputy County Counsel, for Appellant.

C. Stanley Wood, City Attorney (Oakland), and John W.
Collier, Deputy City Attorney, as Amici Curiae on dehalf
of Appellant.

Frank James, Everett H. Mills and Henry Herzbrun for
Respondents.

662

Daniel BE. Farr, W. Torrence Stockman, Albert M. Monaco,
Heller, Ehrman, White & McAuliffe, Bianchi & Hyman,
CG. G. Morse, Todd W. Johnson and Philip D. Johnson as
Amici Curiae on behalf of Respondent.

LANGDON, J.—This is an action by plaintiffs to recover
taxes paid to defendant county on the ground that a part of
the property taxed was operative property of a public utility
and thus exempt from local taxation.

The facts are simple and undisputed. The property con-
sists of land improved by the Edison Building, an eleven-
story structure located at Third and Broadway Streets in
Los Angeles. Plaintiff Third and Broadway Building Com-
pany has the beneficial interest under a 99-year lease. Plain-
tiff Citizens National Trust & Savings Bank holds the legal
title under a deed of trust from Third and Broadway Build-
ing Company, as security for a bond issue. During the
tax years 1927-1928, 1928-1929, 1929-1930 and 1930-1931, a
certain portion of the building (the upper eleven floors and
substantially all of the basement) was used by the Southern
California Edison Company, a public utility, as general
offices, under a lease. The building also contains a theater,
stores and some space not leased to the utility.

In its report of operative property to the state board of
equalization in 1927, the Edison Company did not include
the leased part of the building, nor did it report the prop-
erty as such to the tax assessor of the county. In 1928,
1929 and 1930, it did report it as operative property, de-
seribed as ‘‘general offices’, to the state board, with the
required duplicate to the county assessor. During these
years, however, the plaintiff bank, as holder of the legal title,
made its statement of the property to the assessor, and the
building was assessed and taxes levied thereon and paid
throughout the period, in the total sum of $135,795.51, by
plaintiff Third and Broadway Building Company. Sub-
sequently the company filed its claims with the board of
supervisors of the defendant county for a refund of
$95,057.56, or seventy per cent of the amount of taxes paid,
based upon a seventy per cent use of the building by the
utility in its business. Upon rejection of the claims, this
action was commenced. Defendant county answered and

Ss

plaintiffs moved for judgment on the pleadings. A stipula-
tion of facts was entered into by the parties, and the court
gave judgment for plaintiffs in the sum of $71,980.50 and
costs. Defendant county brings this appeal.

The basic question raised is whether the building, by rea-
son of its exclusive use in part by a public utility in its
business, is as to such part exempt from local taxation. The
principles which govern the answer to this question have in
the main been clearly laid down in prior decisions. The
system of state taxation of the gross receipts of public util-
ities was established by constitutional amendment in 1910
(Cal. Const., art. XIII, sec. 14), and was elaborated upon
in the Political Code (sec. 3664 et seq.). The scheme was
abandoned by constitutional amendment in 1933, effective
January 1, 1985 (Cal. Const., art. XIII, secs. 14, 1444), but
the old law governs this action. Under the plan thus created
in 1910, the utilities pay to the state a tax upon their gross
receipts, in lieu of all other taxes, on ‘‘property or any part
thereof used exclusively in the operation of their business in
this state’. (Cal. Const., art. XIII, sec. 14(a).) This is
described in the statute as ‘‘operative property’. (Pol.
Code, sec. 3665b.) Property not so used, that is, nonopera-
tive property, is taxable locally. The theory of the system
is that the percentage of the gross receipts is a fair equiva-
lent of a tax on the property itself, and that the property
of the utility is not exempted from taxation, but is subjected
to this substituted tax. Operative property contributes to
the earning of income, and is therefore considered as taxed
by the gross receipts tax. Nonoperative property does not
contribute to the income and is not reached by the substi-
tuted tax; hence, it is taxable locally in order that all prop-
erty be taxed in proportion to its value by either the state
or local government. (See Southern Cal. Tel. Co. v. County
of Los Angeles, 212 Cal. 121 [298 Pac. 9].)

The problem created by the operative use of leased prop-
erty has also been definitely settled. [| Property used by
a utility in its business, though as lessee and not as owner,
is nevertheless exempt from local taxation. If this were not
the rule, then double taxation would certainly fall upon that
property, for the utility-lessee would pay through the tax on
its gross earnings, and the owner-lessor would pay a prop-
erty tax locally assessed. This court, following the United

es

States Supreme Court, has condemned such a tax. (Morgan
Adams, Inc., v. County of Los Angeles, 209 Cal. 696 [289
Pae, 811]; Hopkins v. Southern Cal. Tel. Co., 275 U. 8. 398
[48 Sup. Ct. 180, 72 L. Ed. 329]; Central Mfg. Dist. v. State
Board of Equalization, 214 Cal. 288 [5 Pac. (2d) 424].)

The question is thus narrowed down to the effect
of use, not of an entire unit of property as in the Morgan
Adams case, but of a portion thereof, under such a lease.
The Edison Company has used certain clearly identifiable
portions of the building, during the taxable years, exclusively
in the operation of its business. Under the theory of the
gross receipts tax, this part of the-property has been taxed.
by the state. Must the owner-of the building pay another
tax on such part of the property?

The defendant county holds that it must, on the theory
that the building and land constitute a unit, not severable,
and that an apportionment of tax between that part opera-
tively used by the utility, and the balance of the structure,
is neither practically nor constitutionally possible. Reliance
is chiefly upon the leading case of Lake Tahoe Ry. & Transp.
Co. v. Roberts, 168 Cal. 551 [143 Pac. 786, Ann. Cas. 1916H,
1196]. There the plaintiff corporation owned a railroad, and
steamers operated on Lake Tahoe. The boats were used both
in connection with the railroad business of plaintiff, a public
utility, and for traffic on the lake, unconnected with the rail-
road business. The court held that a steamboat was mani-
festly ‘‘a single, indivisible fabric’; and that it was not
“used exclusively’? in the operation of its railroad business.
Hence, it was subject to local and not to state taxation.

The Lake Tahoe case unquestionably reaches a sound con-
clusion, for the steamboat as a whole was used in both busi-
nesses, and, hence, was not ‘‘used exclusively’’ in the utility
business. There is no warrant in the Constitution for dis-
tinguishing between complete and partial use of an indivis-
ible unit of property. But the property involved herein is
of a different character. Here, a clearly defined part of the
property is wholly and exclusively used in the business of
the utility. It is perhaps difficult, but it is not impossible
or unusual, to assess and tax separately the remaining por-
tion of the building.

The other points are two: Whether the plaintiff is pre-
eluded by an alleged failure of the Edison Company to re-

eel

port the leased space as operative property to the board of
equalization as required by section 3665¢ of the Political
Code, and whether the plaintiff is estopped by the return of
the property to the local assessor.

In the year 1927, the Edison Company failed to re-
port the property as operative; in the other years, it reported
it generally, but defendant county claims that the report
was inadequate. We are not impressed with this argument,
for the description, while brief, seems sufficient to place the
assessor upon notice of the claim. However, there was a
failure to report it in 1927, and for the purposes of this
appeal, we may assume that it was not property reported
in 1928, 1929 and 1930. Defendant then concludes that the
utility is estopped to question the classification as nonopera-
tive property, on the theory that the state board of equaliza-
tion is given exclusive original jurisdiction to determine its
character,

Whether this position is sound, as regards the utility, is a
question not involved in this case. The utility does not own
the property taxed herein. The owner, on the other hand, is
neither authorized nor permitted by the statute to make a
report of the property to the state board of equalization.
Thus the position of defendant county on this issue is that
the owner may be taxed on property which has already,
through the medium of the gross receipts tax, paid its tax,
and this because the owner’s right of exemption has not been
pressed before a body to which he has no access, and before
which he has no standing. [J Defendant says that the
lessee utility is the “‘agent’’ or ‘‘representative’’ of the lessor
for the purpose of making this claim of exemption for
operative property. But there is nothing in the statute
which suggests that the legislature contemplated such repre-
sentation. In fact, the language of the Constitution and
statute, and the course of litigation construing them, would
indicate that the problem of owner-lessor and utility-lessee
was not anticipated by the legislature. Certainly no pro-
cedure to protect the right of the owner, save a suit for
taxes improperly levied, is to be found.

‘We think that the right of the owner-lessor to test the
validity of the assessment in a court of competent jurisdic-
tion is not denied, and is, in fact, specifically recognized in
article XIII, section 14g, of our Constitution: ‘“‘after pay-

6

ment action may be maintained to recover any tax illegally
collected in such manner and at such time as may now or
hereafter be provided by law’’.

We are likewise unimpressed with the argument that
the statement of the property to the assessor estopped the
taxpayer from subsequently claiming that it was not taxable.
The chief element of estoppel, reliance by the defendant
upon a representation to its detriment, is lacking. No loss
has been suffered by the county; it has collected a tax not
legally authorized, and it must refund it. If, by reason of
the return, the assessor was in some way induced to forego
a right of the county, there might be some justification for
the contention. But holding as we do that the property is
operative, the taxpayer has an undoubted right to recover
the illegal tax. (See Slade v. County of Butie, 14 Cal. App.
453, 461 [112 Pac. 485].)

‘We may add that this conclusion was forecast by our .
denial of a hearing in the case of Third & Broadway Bldg.
Co. v. Southern California Edison Co., 132 Cal. App. 186 [22
Pae. (2d) 574], where the District Court of Appeal held that
the local taxes levied upon the portion of this building leased
to the utility (70%) were illegally assessed and void.

The judgment is affirmed.

Preston, J., Waste, C. J., Curtis, J., and Seawell, J., con-
curred,

SHENK, J., Dissenting —I dissent. It is admittedly true:
That the plaintiff, a private corporation, is the beneficial
owner of the entire Edison Building; that the portion of the
building leased to the Edison Company on a 15-year lease
from 1918 to 1933, constitutes but 43.27 per cent of the
whole building; that for three tax years (1927, 1928 and
1929) the holder of the legal title returned the entire build-
ing to the assessor for assessment to itself as the owner; that
for the year 1930 no such return was made, and the assessor
assessed the building to the private owner as theretofore;
that for the year 1927 the utility company made no mention
of the property in its return of operative property to the
state board of equalization; that for the years 1928, 1929 and
1930 the only mention of the property in the return to the
state board was included in an item designated ‘‘General

SS

Offices (leased property) ’’, following a list of other property
classed as operative and particularly described by lot and
block number, and that the reason the assessor did not notify
the state board of equalization that he regarded the Edison
Building as nonoperative or as partially operative and par-
tially nonoperative was because he understood and believed
that the Edison Company had not claimed and did not in-
tend to claim that said leased property was operative prop-
erty.

That the property occupied as leased premises was subject
to assessment cannot be questioned. It was assessable to the
private owner unless removed from the local tax-roll as
operative property in the manner provided by law. Whether
it should be so removed depended upon a question of fact.
That fact is ascertained in two ways: First, by the report
of the utility company to the state board of equalization
without objection by the local assessor and, secondly, by the
state board of equalization upon objections by the assessor.
If the property is not claimed by the utility company as
operative in its report to the board it goes on the local roll
as a matter of course and is taxed accordingly. In the case
of a dispute, and there is none unless the utility company
claims it as operative, the controversy is settled in the first
instance by the state board, subject thereafter to review by
the courts. (Great Western Power Co. v. City of Oakland,
189 Cal. 649, 655 [209 Pac. 553].)

The procedure for the determination of whether property
is operative or nonoperative is laid down in sections 3665¢
and 3666 of the Political Code, and the proceeding is in the
nature of a proceeding in rem. As stated, if the property
is not included as operative by the utility company it is not
taxed by the substituted method. This was unquestionably
the case as to the 1927 tax. But it is contended that the
lessor-owner is not subject to the laws providing how publie
utility property shall be classified for the purposes of taxa-
tion. But the property was leased to the utility company
subject to those laws and the lessor-owner is subject to the
local tax unless the property is classed as operative in accord-
ance therewith, just as in such a case the utility company
would be locally taxed therefor. It cannot be said that the
owner-lessor is without means of protection. In the first
instance it is incumbent on him to see that his property is

66S

classed by the lessee as operative, if it be such. In the event
of a refusal by the lessee to do so, the law would undoubtedly
afford a remedy either by compelling its inclusion or in
damages for an unwarranted refusal. With respect to the
tax years 1928, 1929 and 1930, the report of the utility com-
pany to the state board was plainly insufficient to classify
these particular leased premises as operative property. As
to all other property, real and personal, claimed in those
years to be operative, a description thereof, by lot and block
or location, with the assessed valuation, was specifically set
forth. Included therein was a claim of operative property
for office furniture and equipment, of a specific valuation,
and located in the Fay Building, the Laughlin Building, the
Edison Building and Second and Boylston. Notwithstand-
ing these facts the trial court determined as a matter of law
that the item ‘‘General Offices (leased property)’’, was a
elaim of exclusion from local taxation of the property held
under lease in the plaintiff’s building. I am satisfied that
there was every reason for the conclusion on the part of the
assessor, as admitted by the pleadings, that there was no
intention on the part of the Edison Company in its report
to the state board to claim the space occupied by it as opera-
tive property. Also, there would seem to be a plain case of
estoppel on the part of the owner-lessor because of its return
of this building to the assessor for the years 1927, 1928 and
1929 as property for which it should be taxed. The amount
of the refund is large and if the leased property be declared
improperly on the local tax-roll the county will have been
seriously crippled in its fiscal arrangements. This is not the
case of an erroneous assessment as matter of law. It may
or may not be erroneous depending on the facts as they
exist or in this case as represented by the owner to be while
the assessor still had power to act. The owner has led the
assessor, as to said three years, to believe that certain facts
were true, and should not in this litigation be permitted to
contend otherwise. (Sec. 1962, subd. 3, Code Civ. Proce.)
Rehearing denied.

Shenk, J., and Spence, J., pro tem., dissented.

es

[Sac. No, 4802. In Bank—April 30, 1934.]

HOBART ESTATE COMPANY (a Corporation) et al.,
Appellants, v. JULIA WATERS, as Tax Collector,
ete., Respondent.

o
3
Ss

Warren Olney, Jr., Allan P. Matthew, J. Richard Town-
send and McCutchen, Olney, Mannon & Greene for Appel-
Jants.

Robert Brennan, M. W. Reed, Frank Karr, R. E. Wede-
kind, Leroy M. Edwards, Paul Overton, Thomas J. Straub,
Guy C. Shoup, Roy V. Reppy and E. W. Cunningham as
Amici Curiae on behalf of Appellants.

Virgil M. Aivola, District Attorney, for Respondent.

C. Stanley Wood, City Attorney (Oakland), John W. Col-
lier, Deputy City Attorney, and W. Coburn Cook, Special

es

Counsel for Alpine County, as Amici Curiae on Behalf of
Respondent.

THE COURT.—A hearing was granted in this case after
decision by the District Court of Appeal, Third Appellate
District. Upon a full consideration of the cause, we are satis-
fied that the opinion of Mr. Justice Plummer properly dis-
poses of the issues, and we hereby adopt it as the opinion of
this court. It reads as follows:

“In this proceeding the petitioners seek a writ of man-
date from this court directing the respondent to accept the
sum of $229.83 in full payment of taxes levied and assessed
against property belonging to said petitioners situate in the
county of Calaveras, and upon the assessment rolls of said
county endorse the word ‘Paid’, indicating a full discharge
and release of all taxes assessed against said petitioners.

“Omitting a number of the preliminary allegations of the
petition not necessary to be considered herein, the petition
states that on the Ist day of April, 1932, the petitioners filed
with the state board of equalization of the state of Cali-
fornia a report, as required by law, of its operative and
nonoperative property situate in the county of Calaveras;
that the time for filing said petition was extended from the
15th day of March, 1932, to and including the Ist day of
April, 1932, by the state board of equalization pursuant to
section 3667c of the Political Code; that at the time of
filing the operative report by the petitioners herein, peti-
tioners furnished a duplicate report to the assessor of
Calaveras county, that no protest was filed against said
operative report by the assessor of Calaveras county, within
the time allowed by law; that after the time allowed by law
for the filing of a protest by the assessor of any county
where such operative property is situate, the assessor of
Calaveras county did file a protest; that upon motion of the
petitioners, the protest of the assessor of Calaveras county,
so filed after the time allowed by law, was dismissed. The
report further sets forth that during the year 1932 the
assessor of Calaveras county assessed property shown in said
report as operative property, property shown as used in a
‘dual’ capacity both in the carrying on of an operative
and nonoperative business by the petitioners herein, and also
upon property listed in said report as nonoperative.

672 |

“Alleging that the assessment placed upon the petitioners’
property in Calaveras county is illegal, save and except
as it was levied upon property listed as nonoperative prop-
erty in said report, petitioners estimated the amount of taxes
claimed to be legally chargeable against said property, and
tendered the same to the tax collector of said county in
the sum hereinbefore named. This amount was refused by
the respondent as tax collector, who claimed that the total
sum of $2,618.59 was the legal amount of taxes chargeable
against the property of the petitioners herein.

“Upon this hearing it is contended by the petitioners that
the failure of the assessor of Calaveras county to protest
within the time allowed by law against the listing of prop-
erty as set forth in the operative report made by the peti-
tioners herein to the state board of equalization, precludes
the assessing and levying of any tax upon property belong-
ing to the petitioners, save and except that listed as non-
operative.

“On the part of respondent it is contended that the
operative report filed by the petitioners is invalid in that
it was filed after the time allowed by law, and also that
the property used by the petitioners both in their operative
and nonoperative enterprises (called by the parties to this
action ‘dual use property’), is subject only to taxes pay-
able to Calaveras county. The petitioners maintain that
‘dual use property’ is taxable according to the percentage
of uses made thereof; that is, if the properties is used to the
extent of fifty per cent in its operative enterprises and fifty
per cent in nonoperative activities, then and in that case the
percentage of taxes payable to the state and payable to the
county. would be fifty per cent each.

“In making its tender of payment to the respondent there
appears to be no segregation between the amount of taxes
admitted to be due upon the nonoperative property and the
estimated percentage of taxes due upon the property listed
as ‘dual use property’.

“With this summary before us, and without setting forth
a description of the property, and without attempting any
definition of operative and nonoperative property or ‘dual
use property’, only one vital question is presented for our
consideration. [J Before attempting to review the au-
thorities upon what we consider the vital issue herein, it

es or

may be stated that the cases called to our attention we think
definitely settle the law that property scheduled as operative
property in a report to the state board of equalization,
where no protest is made within the time allowed by law,
must be held for the particular year involved as operative
property. To this effect are the following cases: Great
Western Power Co. v. City of Oakland, 189 Cal. 649 [209
Pae. 553], and Great Western Power Co. v. City of Oakland,
196 Cal. 181 [236 Pac. 307].

“*We may also add that even where a protest is
filed, by the last paragraph of section 3666 of the Political
Code, the decision of the state board of equalization as to
what is operative and nonoperative property, and in what
proportion operative and in what proportion nonoperative,
is binding upon all parties, the state, the county, city and
county, municipality or district, unless set aside by a court
of competent jurisdiction.

‘‘Without entering into a discussion of the power
of the board of equalization to extend the time to file an
operative report, we are of the opinion that section 3667¢
of the Political Code authorized the board of equalization
to grant the extension allowed in this case. While the
language of the section is somewhat ambiguous, a reading
of the sections preceding leads to the conclusion that all
reports required by the board upon which it must base its
actions and conclusions, are included within the meaning
of section 3667¢ of the Political Code.

“Other technical objections are made by the respondent,
but as other issues involved in this case are determinative,
we do not deem it necessary to enter into any discussion of
technical objections.

“‘As we have stated, the report filed by the petitioners
with the state board of equalization lists operative property,
nonoperative property, and what is called ‘dual used prop-
erty’, and it only remains for the court to determine
whether, under the Constitution and the various sections
of the Political Code, the assessor of Calaveras county could
legally levy an assessment upon the property coming within
the last classification. No tender of payment of taxes cover-
ing such property is alleged to have been made.

“Section 14 of article XIII of the Constitution, after
setting forth the various kinds of property subject to taxa-
a

674

tion, including the properties operated in the sale of gas
and electricity, uses the following language: ‘and other
property or any part thereof, used exclusively in’ the opera-
tion of their business in this state’.

“Subdivision ‘A’ of section 3665-B of the Political Code,
after specifying what shall be taxed by the state, contains
the following language: ‘Used exclusively in the operation
of the railroad business’, ete. Following this, paragraph 2
of section 8665-C of the Political Code, defining under the
head of ‘operative property’, uses the following words:
‘Each of the companies mentioned in said section shall re-
port in such detail as the state board of equalization shall
prescribe, all of its property in the state which comes under
the definition of ‘‘operative property’’, in section 38665-B
of this code.’ It may be here stated that the report does
not set forth any severable portion of the property belong-
ing to the petitioners as used in an operative capacity, as
distinct from the extent to which such property is used in
a nonoperative capacity. In other words, the ‘dual use
property’ appears to be a unit so far as the report is
concerned. There is no severable portion which can be
said to be used exclusively for operative purposes, and no
severable portion thereof which can be said to be used for
nonoperative purposes. The property which we have herein

* designated for convenience as a ‘unit’ is simply used in a
double capacity.

“‘While the petitioners rely upon the cases of Great West-
ern Power Co. v. City of Oakland, 189 Cal. 649 [209 Pac.
553], and a case bearing the same title reported in 196 Cal.
131 [236 Pac, 307], and the case of San Francisco-Oakland
Terminal Rys. v. Johnson, 210 Cal. 188 [291 Pac. 197], a
careful reading of the two cases wherein the Great Western
Power Company was the plaintiff, shows that they deal only
with the conclusive effect of the decision of the state board
of equalization as to what constitutes operative property,
when set forth as such in the operative report, where no
protest is made by the county assessor.

“In the ease of San Francisco-Oakland Terminal Rys. v.
Johnson, supra, an action was brought to recover taxes
paid under protest based on the theory that the property
was subject only to local taxation, the facts set forth in the
opinion show that the uses made of the property, other than

eee! ois

as operative, were so negligible as not to be legally con-
sidered in the classification of the property, and that the
uses made of the property were really in furtherance of the
business carried on by the plaintiff in its operative capacity.
Tn the instant case the circumstances are readily distinguish-
able from the Oakland cases. Here a separate and distinct
business is conducted in which the property belonging to
the plaintiffs and assessed by the assessor of Calaveras
county, is used, and the portion of property not used in its
local capacity for distribution purposes is used in the gen-
eration of electricity in a public utility capacity.

HI ‘‘‘The cases are numerous to the effect that to re-
move the property from local taxation and place it under
the jurisdiction of the board of equalization for taxation
purposes, the property must be used exclusively in the
operation of a public utility, or of such a business as comes
under the classification found in section 14 of article XIII
of the Constitution.

“In San Diego & Arizona Ry. Co. v. State Board of
Equalization, 165 Cal. 560 [182 Pac. 1044], the language of
the court, after stating the facts involved therein, and re-
ferring to the act of the legislature as it then read, is as
follows: ‘By that subdivision it is provided that the part
of the new road which is in actual use by any company is
deemed to be in operation so as to justify its classification
as operative property, as soon as it affords and renders ser-
vice to the public for compensation. . . . The property also
comes within the description of railroad property, taxable
only for state purposes, as given in the Constitution. The
provision is that all the specified companies shall annually
pay a tax upon the property enumerated, or any part thereof
used exclusively in the operation of their business in this
State.’

“In Lake Tahoe Ry. etc. Co. v. Roberts, 168 Cal. 551 [143
Pae. 786, Ann. Cas, 1916E, 1196], the question involved was
whether a steamer plying upon Lake Tahoe was subject to
state or local taxation. It was there held that while the
steamer, in connection with its agreement with the Southern
Pacific Company, transported passengers, yet it was not
engaged exclusively in such business. The court held that
the property was subject only to local taxation. The lan-
guage in the opinion is applicable here. We quote there-

676 ee

from: ‘The question thus presented is an extremely simple
one, resting as it does, solely upon the meaning of the
language of Section 14 of Article XIII of the Constitution,
which declares, that based upon gross revenue railroad com-
panies shall pay a tax to the state upon certain enumerated
properties ‘‘and other property, or any part thereof, used
exclusively in the operation of their business in this state’’.
The brief statement of facts above set forth shows conclu-
sively that the steamboats of the plaintiff were not used
exclusively in their railroad business, and with equal con-
clusiveness it shows that no severable part of the steamers
is used exclusively in the operation of the business, for
manifestly a steamer in operation being a single, indivisible
fabric, while it may be said that it is partly used for a
given purpose, it cannot be said, as the Constitution declares,
that ‘‘any part thereof’’ is so used.’

“Ags we have stated, no severable part of the unit fabric
which is being used in this case in a ‘dual’ capacity is used
exclusively in the generation of electricity, or in contribut-
ing in any way to the uses and purposes of a public utility.
And, as further said in the opinion, as if in answer to the
petitioners’ contention herein as to a percentage assess-
ment: ‘To illustrate, if this substituted percentage tax
based on revenue is to apply to a single piece of property
partly used for railroad purposes, that indivisible portion
of it not so partly used must be subject to local taxation by
local assessors under the strict ad valorem tax, or it escapes
taxation altogether. How shall a local assessor assess a-
portion of a steamboat? What portion shall he assess and
what shall be the ad valorem value placed upon the portion
which he does assess? All these would be practical ques-
tions under appellant’s contention and would require answer
at the hands of the law. The fact that these manifest con-
tingencies have not been provided for by law is additional
evidence that the framers of the Constitution meant what
they said—namely, that only property used exclusively, or
only a severable part of property used exclusively in the
operation of the business of the company, should be in-
cluded in the list of property whose sole and only tax is
covered by the gross revenue percentage, and that the earn-
ings of other properties not so exclusively used in whole or

es

in part are not an element in the admeasurement of this
tax.’ .

“In San Bernardino County v. State Board of Equaliza-
tion, 172 Cal. 76 [155 Pac. 458], the opinion in the Lake
Tahoe case is reviewed and the view expressed that the
words of the Constitution and the Political Code relieving
public service corporations from local taxation must be
given a fair and reasonable interpretation, yet there is noth-
ing in the opinion in the San Bernardino case limiting,
qualifying or in anywise restricting the scope of the opinion
in the Lake Tahoe case. In the San Bernardino case it
appears that the property in question (an icing plant) was
used exclusively in icing cars used in the transportation of
perishable products, which brings it within the definition of
‘other property exclusively used’ in connection with the
publie service business carried on by the corporation. Thus,
it is not the kind of property, but the use of the property
which determines its classification.

“In Southern Pacific Co. v. Richardson, 181 Cal. 280 [184
Pac. 3], the right of the state or the local authorities to
levy a tax on ferry-boats operated between San Francisco
and Oakland on what is known as the ‘Creek Route’ was
involved. The contention of the state was that, as the boats
were operated by a railroad company, the taxes should be
levied by the state board of equalization. The court, how-
ever, held to the contrary, and points out distinctly that the
other property used in the business of a public utility must
be exclusively used for that purpose. It is further pointed
out in the opinion that to hold such property exempt from
local taxation would be to read into section 14 of article
XIII of the Constitution words which are not there. It is
also held that such a construction would limit the scope
of section 1 of said article, wherein it is provided that all
property shall be subject to local taxation according to its
value.

‘‘The opinion in the Richardson case, supra, is well sum-
marized in the syllabus, from which we quote the following:
‘The fact that subdivision A of Section 14 of Article XIII
of the Constitution, which declares the duty to pay the taxes
provided for in the opening paragraph begins with the
phrase ‘‘all railroad companies’, and in describing the
kinds of property to be so taxed, closes with the phrase

678 Se

“and other property or any part thereof used exclusively in
the operation of their business in the State’’, is not to be
taken as meaning that persons or corporations carrying
on any business of a kind mentioned in the opening para-
graph must be taxed in the same manner and for State
purposes exclusively, upon property which may have a use
exclusively in the operation of a separate public utility
business in this State which otherwise would not be so
taxable. But the only reasonable interpretation is that the
phrase refers only to the kinds of business which are to be
so taxable in the opening paragraph, and includes only the
property which is used exclusively in the operation of such
business.’

“In Pullman Co. v. Richardson, 185 Cal. 484 [197 Pac.
846], the case of Lake Tahoe Ry. Co. v. Roberts is approved,
and in deciding the Pullman case the court quotes from the
Tahoe case as follows: ‘The fact that these manifest con-
tingencies have not been provided for by law is additional
evidence that the framers of the Constitution meant what
they said, namely, that only property used exclusively, or
only a severable part of property used exclusively in the
operation of the business of the company should be included
in the list of property whose sole and only tax is covered
by the gross revenue percentage, and that the earnings of
other property not so exclusively used in whole or in part
are not an element in the admeasurement of this tax’. The
court in the Pullman case takes occasion to italicize the
salient portions found in this quotation.

“In the case of San Francisco-Oakland Terminal Rys. v.
Johnson, supra, the Supreme Court reviews the cases which
we have cited, but we find nothing therein which limits the
language of the Tahoe case where a substantial use is made
of the property for purposes which give it a distinctly local
character. It is pointed out in the Johnson case that the
steamers on Lake Tahoe derived at least 45 per cent of
their revenue from purely local business. In the Johnson
ease it appears that the local business transacted by the
property involved was less than one-half of one per cent.
In other words, the local business was purely negligible, and
did not justify the classification of the property as not
being used exclusively in connection with the business of the
public utility operating the same. The restaurants and

sf

news-stands referred to in the Johnson case were used for
the convenience of passengers who theretofore had been car-
ried upon the railroads, and were necessarily connected
with, and a part of the business of transporting the pas-
sengers carried by the railroad company. The facts in the
Johnson case are readily distinguishable from the case at
bar. Here the report, as we understand it, shows that a
substantial use of the ‘dual use property’ is in the conduct
of a purely local enterprise.

“In the case of People v. Southern Pac. Co., 209 Cal. 578
[290 Pac. 25], it was the use of the property, and not the
ownership thereof that determined its classification. The
property involved in that case was railroad property, and
property used exclusively in the conduct of such business.
We find nothing in this case which limits the holding in
any of the cases heretofore cited relative to the classification
of property.

“In the recent case of Southern California Tel. Co. v.
County of Los Angeles, 212 Cal. 121 [298 Pac. 9], the ques-
tion of whether the property involved was or was not opera-
tive property or property used exclusively in the operation
of a public utility was again before the court. The opinion
in this case reviews all the cases which we have heretofore
cited, and approves the following language found in the
Tahoe case, to-wit: ‘In Lake Tahoe Railway Co. v. Roberts,
supra, the court discusses the method of interpreting these
provisions, and points out that the words ‘‘used exclusively
in the operation of their business’? have a plain and obvious
meaning. It was therefore held that property used only
partially in the business was subject to local taxation.’ The
right of the county to tax property not used exclusively in
the conduct of a public utility was upheld, as likewise,
where the property has a ‘dual use’, in order for it to be
subject to state taxation, the public utility use must relate
to a severable portion of the property having such ‘dual
use’.

“The holding of all of the cases which we have cited is to
the effect that the language of the Constitution specifying
that the property or severable portion thereof, must be
exclusively used by the public utility in order to exempt
it from local taxation is. plain, definite and certain, and

680 Le

requires no construction as contended for by the petitioners,
but only an application to the circumstances presented for
consideration and determination of whether the property
is so exclusively used. J To-hold that the property hav-
ing such ‘dual use’ is subject to local taxation presents no
question of violation of the 14th amendment of the United
States Constitution, as contended for by the petitioners.
The fact that the State Board of Equalization, upon a re-
port including proceeds derived from ‘dual use property’,
levies a tax accordingly, and the petitioners voluntarily pay
such tax, in nowise presents the question of taking property
without due process of law, nor does it bar the constitutional
right of local authorities to levy and collect a tax upon such
‘dual use property’.

“The petitioners making such a report were under
no legal obligations to pay any tax illegally levied. Some
of the cases which we have cited and relied upon by the
petitioners show that the remedies were afforded by paying
the tax under protest and suing for the recovery thereafter.
The failure of the petitioners to pay the state tax under
protest does not relieve them from the obligation to pay any
county tax warranted by the Constitution. J If there
is a difference between the wording of the Constitution and
some ‘of the sections of the Political Code to which our
attention has been called, the language of the Constitution
must prevail. .

HI ‘As we read the operative report it shows upon its
face property not used exclusively for operative purposes,
upon which no tender of taxes was made, which renders it
subject under the Constitution to local taxation, and it is
therefore immaterial whether the assessor did or did not
file a protest as to such property. It is only where prop-
erty is claimed to be operative which the assessor asserts
to be nonoperative, that circumstances are presented which
render it necessary for the assessor to file a protest. If
any of the property, or any severable portion thereof, ex-
elusively used in an operative capacity by the petitioners
as specified in the Constitution, or held as such under the
sections of the Political Code referred to for the fiscal year
of 1932-19383, by reason of the failure of the assessor to file
a protest against the petitioners’ operative report, is in-

681

cluded in the assessment, petitioners have their remedy by
paying the tax under protest, and then bringing an action
to recover the excess over and ‘above the amount which they
are legally obligated to pay. No protest being needed as to
that part of the property listed by the petitioners in their
report to the state board of equalization showing, as we have
said, the legal right of the county to levy and collect a tax,
it follows that the demurrer of the respondent should be
sustained, and it is so ordered.”’
The writ is denied.

[8. F. No, 14959, In Bank—April 30, 1934.]

FRED A. SHAEFFER, Petitioner, v. THE STATE BAR
OF CALIFORNIA, Respondent.

a
ie]
i}

John D. Costello and Bartley G. Crum for Petitioner.

Theodore J. Roche, Sterling Carr, Hartley F. Peart,
Arthur W. Brouillet, Henry F. Boycen, Leo R. Friedman,
Joseph J. Scott, Isidore B. Dockweiler, T. B. Cosgrove,
Jesse W. Carter and Thomas M. Carlson as Amici Curiae
on behalf of Petitioner.

Philbrook MeCoy and W. H. Anderson for Respondent.

6s

THE COURT.—On June 15, 1932, the petitioner was
served with an order to show cause in disciplinary pro-
ceedings before the local administrative committee of The
State Bar for Santa Barbara County. The order contained
six charges on account of matters hereinafter discussed.
The local committee found true the facts alleged in five out
of the six charges, or counts, as they have been termed, and
recommended the suspension of the petitioner from the
practice of the law for the period of one year. After hear-
ing before the board of governors of The State Bar, the
latter body recommended a period of suspension for three
years. The petitioner instituted the present proceedings for
a review. Subsequently he made a motion to remand the
proceedings for rehearing before a local administrative com-
mittee. By stipulation the motion is submitted with the
petition on its merits.

The petitioner was admitted to the practice of law in this
state in 1915 and has practiced his profession in the city
of Santa Maria for about fifteen years.

The record of the testimony and the documentary evi-
dence taken before the local administrative committee and
before the board of governors supports the following state-
ment of the facts as to each of the five counts upon which
the findings are adverse to the petitioner and which are
substantially the facts found by the board of governors.

Count one: In 1927 the petitioner with R. E. Turner,
F. W. Grisingher and others was interested in a subdivision
known as Mt. Pleasanton Square, an addition to the city of
San Luis Obispo. Title to the property was taken in the
name of the petitioner. A map of the subdivision purport-
ing to dedicate to public use the streets shown thereon had
been filed of record. However, the board of supervisors re-
quired a dedication by deed. On August 10, 1927, the peti-
tioner signed his own name and, without their authority,
the names of R. E. Turner and F. W. Grisingher to such a
deed. There is enough difference in the appearance of the
three signatures to support an inference that such difference
was the result of a studied effort to make it appear that
the names had not been written by the same hand. The
petitioner procured his secretary, Beatrice L. Brown, a
notary public, to attach a certificate that said Turner and

684 — |

Grisingher acknowledged the execution of the instrument of
dedication. There is support for the conclusion that at the
time Turner and Grisingher would not have consented to the
dedication, inasmuch as it involved an assessment amounting
to about $440 against each lot for paving work.

Count three: A department of the Superior Court of
Santa Barbara County was established at Santa Maria.
The only jury case pending and ready for trial was one
in which the petitioner represented one of the parties. A
few days before the date set for the trial of the case, in
November, 1931, the petitioner handed to the deputy
sheriff a list of names which he designated as names of
representative citizens who would make good jurors. No
request for such a list had been made. At least one of
those on the list was a former client of the petitioner and
many were acquaintances of his. The deputy turned the
list over to his superior, who instructed him not to call
any of the names on the list. In fact, the jury had al-
ready been called and none of the persons whose names
were on the list acted as a juror in the particular case in-
volved.

Count four: This count involves alleged violations of
rules 4 and 5 of the Rules of Professional Conduct (218 Cal.
exiv), which prohibit respectively the acquisition of an
interest adverse to a client and the acceptance of employ-
ment adverse to a client or former client relating to a mat-
ter in reference to which the attorney has obtained con-
fidential information by reason of or in the course of his
employment by such client or former client. In Novem-
ber, 1927, the petitioner accepted employment by one Lim-
pocker to collect judgments in the sum of $2,200 and other
obligations in the sum of $11,400 against R. E. Turner
and W. L. Harvey, after assuring Limbocker that he no
longer represented Turner as his attorney. It is a fair in-
ference from the record that the employment was offered
and accepted on the understanding that the petitioner was
in a position to know of Turner’s holdings and would be
able to collect the judgments. He was to be paid for his
services a fee representing a percentage of amounts ac-
tually collected on the judgments. The petitioner ob-
tained judgments on the $11,400 obligations against Har-

eee 085

vey and Turner, but failed to record the judgment. Later
developments in divorce proceedings showed that some
property in Mrs. Turner’s name was community property,
and because of the failure to record the judgment no lien
was obtained against it. The record shows that the peti-
tioner made some unsuccessful efforts to collect the judg-
ments as against Harvey, but apparently made no effort
to collect as against Turner. The only payment on the
judgments was the sum of $500 paid for a partial release
of some property of Turner’s from the smaller judgment,
to which Limbocker consented at the petitioner’s request.
Prior to the employment the petitioner had represented
Turner in at least one matter, and during all of the time
and up to the time of the hearing he was his intimate per-
sonal friend and close business associate. There is also
evidence introduced by the petitioner that he accepted
other employments in collections against Turner; also that
he represented Mrs. Turner in the matter of taking some
depositions in the Turner divorce proceedings.

Count five: In 1928 an entity called Shaeffer Associates
was conducting negotiations with reference to a certain oil
lease owned by Withrow. The petitioner was a secretary
or other officer and an attorney for that association.
Withrow had executed as lessor a lease to ‘‘California-
Pacific Company’’ as lessee. The lease provided that it
should not be assigned except with the consent of the les-
sor. The incorporation of California-Pacifie Company was
never completed because of some conflict in the proposed
corporate name. The lease shows that the words ‘‘Califor-
nia-Pacifie Company’’ were erased and ‘‘Metro-Grande Oil
Company’’ substituted. It was delivered to the latter
company and the Shaeffer Associates received the sum of
$8,000 from that company. It is not disputed that the
petitioner at least had knowledge of the change, although
he did not personally execute it, and that the change and
the receipt of the money was without the knowledge or
consent of Withrow, who received no copy of the changed
lease. It appeared before the board of governors that al-
though the amount was deposited to his personal account,
the petitioner received no part of it for his personal use
but the same was disbursed to creditors of the Shacffer

686 EE Ys

Associates. It also appeared before the board that in two
actions brought by Withrow the petitioner had been ex-
onerated of any charge of receiving or converting the same
or any part of it to his personal use and that in a third
action in which the petitioner was not a defendant, With-
row obtained a judgment for the amount against the Shaef-
fer Associates.

Count six: In 1929 the petitioner was interested in an-
other real property subdivision. The title stood in the
name of Beatrice L. Brown, his secretary. It became neces-
sary to convey the title to the unsold lots to a trust com-
pany, and to that end Beatrice L. Brown, in June of that
year, executed a deed and then went on her vacation. In
her absence it was discovered that several lots had not
been included in the deed. The petitioner, without hold-
ing a power of attorney, signed the name of Beatrice L.
Brown to a deed and attached his own notarial certificate
purporting to certify to the acknowledgment thereof by Bea-
trice L. Brown. It appeared, however, that he frequently
signed her name with her consent, that no intent to de-
fraud was involved, and in the proceedings before the local
administrative committee Beatrice L. Brown ratified his act
in the particular instance.

HJ It is upon substantially the foregoing facts that
the majority of the members of the board of governors
recommended suspension for three years. The petitioner
presents a voluminous record of forty-eight instruments
termed ‘‘exhibits’’ which comprise affidavits by the persons
whose names were on the jury list hereinabove mentioned,
by the sheriff and deputy sheriff of Santa Barbara County,
copies of the findings and judgment in the Withrow action
in which the petitioner had judgment in his favor, and
other affidavits and letters specifying the good character
of the petitioner and other matters not necessary to be
noted. The petitioner claims that the receipt in evidence
of the matter included in the foregoing proffered record
would exonerate him of all charges, and on this ground
prosecutes his motion to have the proceedings remanded.
The instruments submitted were executed subsequent to the
date of the findings and recommendation of the board of
governors. We do not deem that the course requested is
necessary in order fairly to dispose of the questions before

es 687

us on this review, nor does it appear that the material
would serve the end hoped for by the petitioner. Prac-
tically all of the material now submitted, at least in sub-
stance, was called to the attention of the board and its
findings show was given due consideration, and on a recon-
sideration of the case the additional matter now presented
would for the most part be merely cumulative.

Hl The petitioner urges that he is entitled to have his
motion to remand granted because the local committee it-
self should have produced the evidence now offered in the
forty-eight exhibits submitted; that its failure to do so was
a violation of rule 28 of the Rules of Procedure of The
State Bar which provides that investigations and hearings
before the committee or board shall be informal, but
thorough, with the object of ascertaining the truth. (213
Cal. exxix.) The language of this rule is not to be con-
strued as permitting the petitioner to remain idle or leav-
ing him without any duty in the premises. If the attor-
ney through neglect or otherwise fails to make a complete
disclosure, he may be unable on a review to show that the
decision of the board is erroneous. (Stafford v. State Bar,
219 Cal. 415 [26 Pac. (2d) 833].) Likewise the practice
pursuant to such a rule requires that the attorney present
any evidence available to him which he deems favorable
to himself, to the local committee and the board, where
such evidence may appropriately be received, and he may
not neglect or withhold his activities in that respect and
then successfully demand on his petition for review either
that such evidence may properly be considered by this
court or that he is entitled to another hearing in order
to have it considered by the appropriate body.

HJ The petitioner makes the contention that Honor-
able John Perry Wood was disqualified to sit as a mem-
ber of the board of governors for the reason that prior to
the hearing before the board he had made a report as a
reviewing governor for the benefit of the members of the
board; that although he had withheld his recommendation
from his report, so it is stated, he nevertheless had pre-
judged the case against the petitioner. Further, that pur-
suant to the rules the report of the reviewing governor is
a part of the record and, together with the views of the
other members of the board, should have been included for

688 De Ye

the benefit of the court on review. It appears that the
report was a confidential communication by the reviewing
governor to the other members of the board, prior to the
hearing before it, of the state of the record of the proceed-
ings before the local administrative committee. As such it
forms no part of the record and was not a matter to which
the petitioner had any right of access. Such a communica-
tion is but a step in the private deliberations of the fact-
finding body and no question of the disqualification of the
members of that body can arise by virtue of its prepara-

. tion. It appears that the record before us contains all mat-
ters which. are required to be made a part thereof.

TM he petitioner complains that he was not served
with a copy of the proposed findings prior to the filing
thereof with the clerk of the Supreme Court. There is no
rule applicable to disciplinary proceedings before The
State Bar which requires the service of findings on the
attorney prior to their adoption and filing by the board.

HH The petitioner advances several reasons why the
recommendation of suspension for a period of three years
is, in his opinion, not sustained by the record. He urges
that in some instances the charges are stale, and that in
others, as in counts three and six, no one appears to have
been hurt. The present case is not one where such exten-
uating circumstances may be said to condone the major of-
fenses involved. In a case where it appears without dis-
pute that the attorney has written the names of others
to a deed without authority and has procured a false cer-
tification of acknowledgment thereof, and in another in-
stance he himself has issued a false certificate of acknowl-
edgment, and where, in another instance, his relations with
two opposing interests are, to say the least, questionably
conflicting, we cannot say that the period of suspension
recommended by the board is unreasonable.

The motion to remand is denied and it is ordered that
the petitioner be suspended from practice as an attorney
and counsclor at law of this state for the period of three
years from and after the filing of this order.

LANGDON, J., Dissenting—I dissent. I am convinced
that the record before us is insufficient to enable this court
to do justice in this matter. The motion to remand the

eee a9

proceeding for the taking of further evidence should be
granted.

SEAWELL, J., Dissenting—I am of the opinion that
the motion to remand the proceeding for the taking of fur-
ther evidence in view of the affidavits and showing made
by petitioner should be granted. It is true that the show-
ing which he claims that he is able to make, and which,
without very great reason he failed to make, when the
cause was properly before the local administrative com-
mittee and before the board of governors, may fail and
result in a recommendation similar in effect to the one now
before this court, nevertheless, it would remove all claims
of petitioner that he was, for any reason, denied full op-
portunity to present his defense. If the charges are true
as found, and as the record now stands, there is ample evi-
dence to sustain the recommendation of the board of bar
governors, petitioner was not harshly or unjustly dealt
with. If the evidence which he proposes to present does
not support his claim, he surely will not have improved his
situation. That contingency is a matter for his determina-
tion. Solely to the end that this court may have for re-
view all of the material facts bearing upon the charges
preferred against the petitioner I vote for granting the
petition to remand the cause for further proceedings.

Rehearing denied,

Langdon, J., dissented.
as

[S. F, No. 14989. In Bank—April 80, 1984.]

FRANK E. KILPATRICK, Petitioner, v. THE STATE
BAR OF CALIFORNIA, Respondent.

690 |

’ Edwin V. McKenzie for Petitioner.

Philbrick McCoy for Respondent.

THE COURT.—Application is made for a review of the-
action of the board of governors of The State Bar of Cali-
fornia in recommending the suspension of the petitioner
from the practice of the law for a period of two years.
On October 20, 1932, Frank E. Kilpatrick and Booth B.
Goodman, his partner in the practice of law in Oakland,
were served with a notice to appear before Local Adminis-
trative Committee No. 8 of Alameda County and show
cause why they should not be disciplined for professional
misconduct. The misconduct charged was in connection
with the actions of Katherine M. Baldwin v. The Peerless
Stages System, a Corporation, and Harry Baker, numbered
120,420, and 8S. 8, Baldwin v. The Peerless Stages System,
a Corporation, and Harry Baker, numbered 120,421, in
which the firm of Kilpatrick & Goodman were attorneys for
the plaintifis. The charged misconduct consisted of viola-
tions of rule 15 of the Rules of Professional Conduct of
The State Bar and of subdivision 5 of section 287 of the
Code of Civil Procedure by the commission of acts in-
volving moral turpitude, dishonesty and corruption. The
charges were set forth in five counts, alleging: That Kil-
patrick and Goodman secured King, a material witness
whose testimony would tend to establish a material fact, to
avoid service and secrete himself and sought to make his
testimony unavailable by allowing their agents to keep him
away from the trial and away from the representatives
of the defendants in these actions; that, by and through

oon

their agents, they took charge of King during the trial and
prevented his attendance as a witness and prevented the
defendants from procuring him as a witness, well knowing
that he would prove to be a valuable witness for the defend-
ants; that, knowing his testimony would prove favorable to
the defendants if produced, the petitioner and Goodman
attempted by their agents to advise King to testify falsely
should he be called; that, subsequent to the rendition of
judgment in the damage actions, and while a motion for new
trial was pending, they sought to procure from King an affi-
davit to the effect that he knew nothing about the facts in- .
volved in the actions, although they well knew that he had
imowledge of the facts and if produced would give. testimony
favorable to the defendants; and, that for the purpose of
procuring King to.absent himself from the trial Kilpatrick
and Goodman, through their agent, offered King the sum
of $200 and thereafter paid him $77 for remaining away
and secreting himself, and that they further offered to pay
him if he would refuse to sign any affidavit produced by
the defendants in their efforts to secure a new trial.

The local committee was of the opinion that the charge
against Kilpatrick was sufficiently established but that the
charge against Goodman failed, and it therefore recom-
mended that the charge against Goodman be dismissed but
that Frank E. Kilpatrick be suspended for the period of
three years. By a vote of eight to six the board of gov-
ernors adopted the findings of fact of the local committee
and recommended that Kilpatrick be suspended for a
period of two years, the six dissenting votes being placed
upon the ground that the corroborating testimony was in-
sufficient.

The Baldwin actions arose out of a collision between the
Baldwin Chevrolet and one of the Peerless Stages System
busses. The trial began on Friday, January 22, 1932, and
continued until Thursday, January 28th. There is some
doubt whether King actually saw the accident, but, at any
rate, he was on the spot immediately after it occurred and
the next morning signed a statement, obtained by T. N.
‘Hay, investigator for the bus company, which was defi-
nitely in favor of the driver of the bus on the question of
negligence. Shortly thereafter he moved from Oakland,
and at the time of the trial he was living in Saratoga but

692 EE

was engaged in the operation of an automobile cleaning
and paint shop in San Jose. Both sides had been trying
to locate him but neither was successful until’ Monday,
January 25th, the second day of the trial, when Nimmo,
the investigator for Kilpatrick & Goodman, found him at
his paint shop and interviewed him there. So far there is
practically no conflict in the evidence, it being conceded
that up until this interview Nimmo could not have known
what the testimony of King would be. But from this
point on the stories of King and Nimmo vary greatly.
King’s story being that, after learning what his testimony
would be, Nimmo told him that he would be well paid if
he kept away from the trial or if he would ‘‘forget’’ about
the accident if he were subpoenaed by the defendants. On
the other hand, Nimmo insists that he regarded King’s
testimony as favorable to the plaintiffs and that all his
activities were in furtherance of an attempt to persuade
King to come to the trial and testify but that King was
reluctant to do so, particularly because he had given Hay
a signed statement contrary to the true facts which he
excused on the ground of sympathy for the bus driver
(and King has admitted that the reason he signed the state-
ment was to save the bus driver’s job) and also because he
did not want to leave the shop he was just opening.

The report of the local committee points out that the
hearing was extended and the testimony voluminous and in-
eapable of complete reconciliation, the complainant King
in particular being ‘‘indefinite and confused as to the order
of time in which events occurred’’ but that nearly all ma-
terial portions of his testimony with regard to dealings
with Nimmo and Kilpatrick are corroborated by other wit-
nesses, although there is some contradiction by reputable and
apparently uninterested witnesses. But, ‘‘viewing the testi-
mony as a whole, and disregarding some contradictions by
apparently disinterested witnesses’, the committee con-
cluded that ‘‘Nimmo’s activities were directed toward keep-
ing King away from the trial rather than getting him to
court as a witness; that Nimmo did promise King money
for staying away and did pay him substantial sums for
that purpose’; and ‘‘that the respondent Kilpatrick was
entirely aware of what Nimmo was doing with respect to
this matter’’,

es 698

King’s testimony is substantially as follows: He signed a
written statement the morning after the accident for an in-
vestigator of the bus company and signed it of his own
free will and without compensation therefor and, with the
exception of the dates, it is true. He first saw Nimmo in
San Jose when he came to King’s shop and said he was
from Kilpatrick & Goodman and came to see about the
accident. He, King, drew a diagram on the floor of the
shop for Nimmo, whereupon Nimmo exclaimed, ‘‘My God, we
can’t have you in this!’? Nimmo then took him out to lunch,
at which time he asked him if there was not some way he
could forget something about the accident and said he would
pay him well if he would keep away from the trial. King
later testified that Nimmo never at any time asked him to
be a witness. On this same occasion Nimmo told King
that the investigators for the bus company were looking for
him and asked if they had seen him. King then told of the
statement, but said he had seen no one since. He also told
Nimmo he was going to Oakland in a day or so and Nimmo
gave him his card and told him to call him when he got there
and not to let ‘‘the boys’’ see him, referring to Jimmy
Buck and one, Lydon, who are not identified. King went
to Oakland the following day with his brother-in-law to
look at a restaurant and telephoned Nimmo from there.
He testified that Nimmo arrived about fifteen minutes later,
alone in a Ford coupe, and that Nimmo gave him $10 and
said he would sce him later, but no conversation was had
about the accident. (It seems to be conceded that King’s
trip to Oakland was on Tuesday of the trial.) The next
day Nimmo came to Saratoga around 7 A. M. and inquired
for King at the house of Mrs. Graham, a neighbor of King’s
who, with her husband, was interested in the San Jose
shop and through whom King received his telephone mes-
sages. Mrs. Graham got King and he agreed to meet Nimmo
in San Jose at the paint shop. At this conversation King
told Nimmo he did not want to appear, and Nimmo said,
“What would you do if we had to subpoena you?” King
replied that he would tell the truth, and Nimmo asked if
he could not ‘‘forget a lot of this’? and King repeated that
he would tell the truth if subpoenaed. Nimmo then in-
sisted upon taking King to the office of Randall O’Neill, a
lawyer in San Jose, who, he said, was a good friend of Kil-

694 ee |

patrick’s. Nimmo talked with O’Neill first alone and then
King asked O’Neill if he would get into trouble by staying
away from the trial, and O’Neill said he would not if he
were not subpoenaed. O’Neill further said that he knew
Mr. Kilpatrick well and that Kilpatrick would back up what-
ever Nimmo said. King said he had not told O’Neill at
the time of the offer to pay him and no mention of money
was made at this interview, and in fact he later testified
that the first definite offer of money was made on a subse-
quent occasion, King next saw Nimmo when he came to the
home of Mrs. Graham at 8 o’clock that night (this would be
Wednesday evening, according to King’s version) and said
the inspector from the bus company was coming down to
see him and he wanted King to come and spend the night
with him in a San Jose hotel. He told the Grahams he was
taking King with him for the night and they all had a
drink of whisky supplied by Nimmo. King was taken out
and introduced to Kilpatrick, who was waiting in the car
outside (Kilpatrick’s car), and they all drove to San Jose
where Kilpatrick was left at a hotel, Nimmo and King re-
turning to the Grahams, where they had a party on liquor
furnished by Nimmo. On the way in to San Jose with
Kilpatrick nothing was said about the accident or King’s
testimony. There were present at the Graham home, the
Grahams and King’s two brothers-in-law, Smith and Bar-
nett. The accident and King’s value as a witness were the
main subjects of conversation. Nimmo told them that he
was going to take care of King, that they could win if he
were kept away from the trial and that they would all
have money when the trial was over. Nimmo thanked Mrs.
Graham for answering the phone and said he -would give
her $50. On another occasion he is said to have promised
her a motorcycle to be used in connection with the paint
shop. Nimmo returned about 6 or 7 o’clock the next morn-
ing (Thursday) and told King the bus company investi-
gators were in San Jose and not to wait for breakfast. He
took King to Los Gatos for breakfast and then to Santa
Cruz. On the way they discussed the accident, stopping
for King to draw a map on the highway by Holy City, and
Nimmo promised King ‘‘between $200 and $500’? not to go
to the trial or “‘kmow too much” if subpoenaed. Arrived
in Santa Cruz, Nimmo telephoned the office from a gasoline

es

station and then went to a dairy where the Bohns (King’s
niece and hor husband) worked. There they all discussed
the trial and King’s staying away from it, which Nimmo
gave as the reason for their appearing so early in the morn-
ing. Nimmo then wanted to go to Livermore, but King
refused. They reached Saratoga again about 2:30 in the
afternoon. Mrs. Graham said two men had been to see
King and described them. Nimmo said one was Mr. Licking,
the attorney for the bus company. However, Hay said
their first trip to Saratoga to see King was on the thirtieth
day of January.

The next day (this would be Friday, January 29th) Hay
and Licking came and asked King to sign the affidavit, which
he refused to do, but made an appointment for noon the
next day at the paint shop. The next day (Saturday) Nimmo
arrived at the paint shop, and, having heard about the ap-
pointment with Hay, tried to get King to go to O’Neill’s
office to sign an affidavit to the effect that he knew nothing
about the wreck, but on King’s refusal, he asked him to go
for a ride, and when he got him in the car took him to San
Francisco, stopping at the Hood Tire Co. to see some men
Nimmo knew, and then across the bay to Oakland about 4
o’clock. Nimmo said he had to go to the office and arranged
to meet King on Twelfth Street about 5 o’clock. After
that they went to Hayward and had dinner, then back to
Saratoga, arriving about 8. King was called to the tele-
phone, but Nimmo insisted on answering it for him. Nimmo
said he was King, and then: ‘‘You fellows high-powered me
into signing this statement, and I don’t want another damn
thing to do with it, so you might as well leave me alone’.
When he had hung up he said: ‘‘By God, I guess that will
hold them.’’? King said he did not ask Nimmo to answer
for him.

A few days later Nimmo came: down and said the case
was won, and about three days after that he tried to get
King to sign an affidavit to the effect that he knew nothing
about the accident, saying it was to be used in case of a
new trial. King refused. The next day King tried to call
Nimmo from Saratoga to tell him someone had been trying
to get in touch with him, but Nimmo was out and he talked
to Goodman (which, of course, Goodman denies). Later
Nimmo came and had his car washed and made another

6 es = pes

attempt to secure an affidavit and said that the plaintiff had
moved for a new trial. King said Nimmo promised him
money at least six or eight times, that he gave him $10 in
Oakland and $10 the second time they went to Santa Cruz,
and $7 at Mrs. Graham’s. King could not fix the time of
the second trip to Santa Cruz and admits that $7 was the
charge for washing and polishing Nimmo’s car, but says
that was paid at another time and place. Barnett testified
to this payment, which was made in the evening in the
driveway near his house. Nimmo on several occasions told
King he would be paid as soon as the case was settled. In
June or July King went to the office of Kilpatrick & Good~
man, and Nimmo being out, he saw Kilpatrick. He asked
for the rest of his $200 and said he had been paid only
$27. Kilpatrick said he would have to wait and see Nimmo
that afternoon as he understood he had been paid $150, but
he finally agreed to pay him $50 and find out about the rest,
and told King to come back at 3 o’clock and he would have
it in cash, that he could not give him a check. This visit
was in the morning and Barnett was with him. Barnett
returned with him at 3 and Kilpatrick sent them into another
office to see Nimmo; when Nimmo came in Barnett left and
Nimmo paid King $50 and said he could have the rest in
two or three weeks. After two or three weeks King went
to see O’Neill and told him he had not received all his
money. O'Neill reassured him, and some time later when
King again went to see him with the same complaint O’Neill
telephoned Kilpatrick at King’s request and in his presence,
and reported that Kilpatrick wanted King to go to Oak-
land and see him. King again went to Oakland, having a
woman telephone because Kilpatrick was never in when he
called. Kilpatrick being out and expected back about one,
King and the lady went to the office about that time.
Neither Kilpatrick nor Nimmo were in and they left a
number for him to call. Nimmo finally called and said
Kilpatrick would have nothing more to do with King.
Thereafter King went to the office of another attorney in
San Jose, to whom he explained the matter and who wrote
Kilpatrick and Goodman demanding the remainder of the
$200. Goodman replied to this letter in Kilpatrick’s ab-
sence, saying that King had rendered them no services and
had no money coming to him. King further testified that

oor

he was advised by him to take the matter up with the Bar
Association.

Frank E, Kilpatrick testified that the first he heard of
King was from Nimmo when he had located him. He knew
there was some man who had seen the accident and that
Nimmo was looking for him. Nimmo telephoned and said
he had found King and thought he would make a good
witness, but he was reluctant to testify because of his pre-
vious statement and wanted legal advice. Kilpatrick tele-
phoned Randall O’Neill and said he was sending King in to
see him. Nimmo’s instructions were to bring King in to
testify and these instructions were never changed. All
during the trial he was attempting to do so, and Kilpat-
rick, himself, made one trip to Saratoga for the same pur-
pose. However, when he got there Nimmo told him in
King’s presence that it was all right now and King was
coming so nothing more was said about King’s testifying.
He explains this by saying that Nimmo was an experienced
investigator upon whose judgment both he and Goodman
relied and that Goodman was handling the entire trial so
that his purpose was merely to get King to come in so Good-
man could talk to him and call him if he wanted to. Neither
he nor the firm paid King any money, although he admitted
that if Nimmo paid him he must have gotten it from him,
Kilpatrick, or else out of his own pocket as he had no draw-
ing account. He did not know the defendants were looking
for King until after the trial, when Licking told him they
were trying to get an affidavit for use on a motion for new
trial. With regard to the firm accounts the testimony of
both Kilpatrick and Goodman shows that the record of what
was spent in connection with any one matter was extremely
easual and there was a possibility that money spent on
this case might not appear on the register of actions under
this case or on the sheets submitted to the committee’s in-
spection. Kilpatrick further testified that he saw King
only once in his office at about 2 o’clock in the afternoon,
that Barnett was with him but stayed outside in the recep-
tion room when King came into his office and that the door
was closed. King asked for money, but did not ask for
any particular sum or mention $27. Kilpatrick told him he
did not owe him anything because he had not testified. As
King left the office Nimmo entered the reception room and

698 i

King followed him into Goodman’s office. Nimmo told
Kilpatrick that King had said he wanted some of the money
made in this case or he would make it hot for everyone.
Kilpatrick denied sending King in to see Nimmo, denied he
ever talked to O’Neill about paying King, and denied he had
told Smith, examiner for The State Bar, that he had paid
King $77 to testify, but King had failed to do so.

Randall O’Neill testified that he first heard of King when
Kilpatrick telephoned and said he was having Nimmo bring
him in to see him for legal advice. When they came,
King’s main concer was whether he would get into trouble
by testifying contrary to a statement he had signed imme-
diately after the accident to save the bus driver’s job. He
understood King wanted to testify for the plaintiffs. He
did not assure King that Kilpatrick would stand back of
Nimmo’s promises, the first he heard of the $200 was several
months later when King came in and said he had received
$77 and had $123 coming. O’Neill at King’s request tele-
phoned Kilpatrick in King’s presence and Kilpatrick said
he owed him nothing. O’Neill then suggested to King that
he go see Kilpatrick. This was not at Kilpatrick’s sug-
gestion but was his own idea. King, on cross-examination
admitted having told Nimmo before he went to O’Neill’s
office that he would not do anything or go anywhere until
he had had the advice of an attorney. O’Neill testified that
King only came into his office with Nimmo once, he later
came several times about money he claimed was due him.
Nimmo asked O’Neill later to prepare an affidavit about
the accident for King’s signature but did not come back
because King refused to sign it. He saw King a number
of times (apparently in connection with King’s shop) be-
tween the time he came with Nimmo and the time, several
months later, when he first mentioned the money.

Steven Nimmo’s story is that he was looking for King
and knew the bus company were looking for him also, that
he first found him on Monday, January 25th, at his wash
rack in San Jose. He does not recall King’s drawing a
diagram but his impression was that his testimony was
valuable to the plaintiffs, he tried to get King to go to
Oakland but he was too busy getting his shop started, that
he was also worried about the statement he had already
made for Hay and in addition he did not want to appear

es 609

around the courthouse because he was wanted by the Oak-
land police on a check charge. He did not subpoena him
because he was afraid of antagonizing him. King said sev-
eral times he would go to Oakland but Nimmo did not get
him there until Wednesday, January 27th, when the trial
was almost over. He picked him up early in the morning
of that day to take him to Oakland but King insisted on
going to Santa Cruz and when he got there Nimmo let him
out to see some people and when he came back he was
practically drunk. King then insisted on going to San
Francisco to a tire shop and when Nimmo finally got him
to Oakland it was about 8:30 or 4 o’clock, he took King
to the courthouse but Mr. Goodman was arguing a motion
and could not use him then and told Nimmo to bring him
to the office after court. This is substantiated by M. B.
Moore, an attorney who had an office in the same suite as
Kilpatrick & Goodman and who carried the messages be-
tween Goodman and Nimmo and saw King waiting in the
car by the courthouse. Nimmo says he then left King at a
barber-shop on Twelfth Street and when he came back for
him he was in a speakeasy, drunk. Nimmo then reported
to Goodman (who corroborated this part of his story) and
told him he was through ‘‘chaperoning a drunk’? and he
considered King too unreliable to use anyhow. He then
took King back to Saratoga arriving at about 8 P.M. He
admits impersonating King over the telephone that same
evening but says it was at King’s request. Nimmo’s story
of the visit to Randall O’Neill’s office and of Kilpatrick’s
trip to Saratoga are consistent with O’Neill’s and Kil-
patrick’s. He says he only went to Santa Cruz once and
that was at King’s insistence, he places the Oakland trip on
the same day. He says he never offered King money ex-
cept for compensation for loss of time, he loaned him small
sums out of his own pocket at various times, for instance,
King borrowed $5 on the day he came to Oakland in order
to go to San Francisco to buy equipment for his shop, but
these sums did not amount to $27. He did not tell King
to call him but King did so because he wanted money. On
several occasions King told Nimmo the bus company had
offered him $100. It is admitted that King tried to get a
job with the bus company, interviewing the superintendent
who first questioned him about the accident. Nimmo flatly

700 ee =

denies all the statements he is said to have made to King’s
relatives and friends about King’s being a star witness for
the defendants and paying him well not to appear. He
says King would not sign an affidavit for the motion for
new trial because he would not pay him to do so. Nimmo
said that after the trial was over King came to the office and
demanded money and threatened to make trouble and that
he, Nimmo, threw him out. This story is substantiated by *
Fenton, an adjuster friend of Nimmo’s who overheard the
conversation in Goodman’s office. Nimmo does not recall
telephoning the office from the gas station on the Santa
Cruz trip but he thinks he may have and thinks also he may
have said that he had King with him and that he was drunk.
Montell, who ran the service station, identified King, said
he was in a car which he described as similar to Kilpat-
rick’s with a man who made a long-distance telephone call
to ‘‘May’’, saying: ‘‘I have him out here in the car driving
around,’’ that the man who telephoned then told Montell he
had a man in the ear who was drunk and whom he had to
keep away from a trial in Oakland. He talked with King
and saw him walk and he did not think he was drunk. All
Kilpatrick’s witnesses said that there was no one in the
office named May.

The Bohns, Mrs. Graham and Barnett all substantiated
King’s story testifying to declarations of Nimmo about the
irial, King’s value as a witness and promises to reward him
for keeping away from the trial and directions not to see
‘anyone from the bus company. Mrs. Graham testified that
King did not ask Nimmo to answer the telephone for him,
she and Barnett both witnessed the drinking party at her
house and Barnett substantiated King’s story of the visit to
Kilpatrick’s office and of Kilpatrick’s saying he thought
King had received $150, but would give him $50 if he re-
turned that afternoon. Barnett cannot, however, describe
Kilpatrick’s office at all and Mrs. Bowles, Kilpatrick’s secre-
tary, says King came in about 10 or 11 o’clock in the morn-
ing with a woman and asked for Kilpatrick or Nimmo,
neither of whom were in, that he returned in the afternoon
with a man and went alone into Kilpatrick’s office and that
the door was closed, that when he came out Nimmo was just
coming in and King went with him into Goodman’s office.
All the witnesses who corroborate King are, with the excep-

70

tion of Montell, upon whose testimony the committee placed
great weight, either relatives or closely connected with him,
and while their testimony corresponds very closely with
regard to many details, the comparative dates of the inci-
dents which they relate are very confused, as they are by
King himself. They all place these events in February or
March, whereas they almost all occurred in January.

Hay testified that he first went to Saratoga in search of
King on January 80th, when he saw Barnett who said King
was in San Francisco. He did not see King until February
2, 1932, after the conclusion of the trial when he went with
Mr. Licking to get him to sign an affidavit prepared in ac-
cordance with his signed statement which they wished to
use in support of a motion for a new trial. Hay and Lick-
ing both testified that King was reluctant to sign the affida-
vit although he said his statement, a copy of which they
gave him to read, was substantially correct. King said he
wanted to consult with someone first. Both Hay and Lick-
ing suggested attorneys from whom he might get advice
and Hay made an appointment to mect him at noon at his
shop about three days later and get his decision. King did
not appear at his shop at the appointed time or at all that
afternoon and at 5:30 Hay telephoned him and got the
message which Nimmo is said to have given him, although
Hay is positive it was King talking. Thereafter, they made
no further effort to obtain King’s affidavit. Aside from
this, Hay’s only attempts to find King were a trip to Calis-
toga on January 25th and the trip to Saratoga on January
30th.

Hl The main contention of the petitioner is that the evi-
dence is insufficient to support the findings of the committee
and we think this contention must be sustained. The find-
ings against him rest almost entirely upon the testimony of
King, aside from which there is little or no evidence tend-
ing to show his participation in or knowledge of the activi-
ties of Nimmo.

Were we able to give the testimony of King the weight
which has been accorded to it by the majority of the mem-
bers of the board of bar governors, not only would we feel
that the recommendation made by the board should be ap-
proved, but we would be inclined to enter a judgment of
disbarment. Conduct by an attorney such as that which is

702 Le |

the basis of the charge against the petitioner not only tends
to impede the progress of litigation in the courts, but de-
stroys that fairness with which litigation should be con-
ducted. By his own testimony and that of others, the princi-
pal witness, King, has been shown to be extremely unreliable.
For this reason, the recommendation of the board of bar
governors, based upon the findings of the local committee,
cannot be approved.

Nothing contained in this opinion is intended as a reflec-
tion or criticism of any of the acts or conduct of either of
the San Jose attorneys consulted by either Nimmo or King,
as apparently both of said attorneys acted in good faith
and conducted themselves at all times herein referred to in
a proper manner and in keeping with the dignity of the pro-
fession.

It is therefore ordered that the proceedings against the
petitioner be, and they are hereby dismissed.

[S. F. No. 15048. In Bank.—April 30, 1934.]

FRANK W. SAWYER, Petitioner, v. THE STATE BAR
OF CALIFORNIA, Respondent.

ee 708

Frank W. Sawyer, in pro. per., for Petitioner.

Philbrick MeCoy for Respondent.

THE COURT.—Application for writ to review the find-
ings of the board of governors of the The State Bar and the
recommendation based thereon that petitioner be suspended
from the practice of the law for six months for a violation
of rule 3 of the Rules of Professional Conduct of The State
Bar of California. Rule 8 provides that a member of The
State Bar ‘‘shall not employ another to solicit or obtain, or
remunerate another for soliciting or obtaining, professional
employment for him; nor shall he directly or indirectly share
with an unlicensed person compensation arising out of or
incidental to professional employment; nor shall he directly
or indirectly aid or abet an unlicensed person to practice law
or to receive compensation therefrom’. .

Formal proccedings were instituted against petitioner after
a preliminary investigation by local administrative committee
No. 3 of the city and county of San Francisco. The peti-
tioner pursuant to rules 10 and 11 of the Rules of Procedure
of The State Bar was ordered to show cause before local
administrative committee No. 4 of the city and county of
San Francisco why he should not be disciplined for pro-
fessional misconduct in violation of said rule 3 and section
287 of the Code of Civil Procedure, because of the charges
set out in six separate and distinct complaints, all of the
same general import, to the effect that petitioner had at

704 EE |

different times and on different occasions solicited of differ-
ent persons legal employment, either professionally or
through an unlicensed layman employed by him, for a cause
of action alleged not to be legal or just and so known to be
by petitioner; that in such false solicitations false and slan-
derous statements were made as to different corporations;
that money was collected by petitioner ostensibly for legal
services in connection with said statements and part of it
paid to said unlicensed laymen for services in aiding peti-
tioner, thereby permitting a layman to receive compensation
from the practice of the law; and that after the receipt
of said moneys no legal services were actually rendered.
There was also an allegation that petitioner had wilfully
represented himself as an attorney for a stockholder when
not so actually employed.

The petitioner filed an answer to the allegations of the
order to show cause as provided for in rules 18, 23 and 24
of said Rules of Procedure, and denied categorically each
and every of said specifications of misconduct set out in
each of the six separate and distinct complaints.

In making these denials the background of the petitioner’s
position appears substantially in finding No. 4 of local ad-
ministrative committee No. 4, reading as follows:

“(a) That respondent is now and continuously since the
year 1889 has been licensed to practice and is practicing law
in the state of California.

“(b) That respondent is sixty-eight years of age.

“*(¢) That continuously since the year 1904, respondent
has been specializing in investigating corporations for the
benefit of shareholders and has, during all the time last
mentioned, maintained a system to obtain information con-
cerning the management of corporations, and on numerous
and various occasions was employed by other members of the
bar to represent their clients in investigating and/or prose-
euting their claims as shareholders against corporations.

**(d) That since the year 1904, respondent’s experience
in his said specialty was that nearly always, dissatisfied
shareholders would call at his office and engage him to in-
vestigate the management of corporations in which they held
shares. On very limited other occasions he was employed by
organizations specializing in investigating corporations.

105

“(e) That National Bureau of Corporation Research was
organized for the purpose of investigating corporations.
That the respondent accepted employment as counsel for said
National Bureau of Corporation Research in connection with
the investigation of certain corporations and the arrange-
ment was that the Bureau would engage men to contact the
shareholders and such of the shareholders as were willing
would advance a sum of money equal to 10% of their in-
vestment in the shares and this money was paid to respond-
ent who divided it as follows:

“30% to National Bureau of Corporation Research,

“40% to the solicitors employed by the Bureau, *

“30% for respondent.’?

The petitioner did not object to these findings but takes
the position that. he accepted only professional employment;
that he himself employed no one to solicit or obtain such
employment but that such persons were employed by the
National Bureau of Corporation Research to contact share-
holders of various corporations dissatisfied with the conduet
thereof and that he acted as counsel under employment by
said bureau; that he himself had nothing to do with the
organization of the Bureau of National Research beyond
preparing its articles of incorporation at the instance of
M. J. Anderson, which articles were filed in the proper
offices, but no further steps taken toward corporate organi-
zation. It appeared that said bureau occupied adjoining
offices to petitioner and a common reception room was used.

At the conclusion of the hearings held during the year
1932, wherein oral evidence was taken and many exhibits
introduced, local administrative committee No. 4 found that
as to the .“‘second’? and ‘‘fourth’’ separate and distinct
complaints the facts therein set forth were not true; and that
as to the ‘‘first’’, ‘‘third’’, and ‘‘sixth’’ separate and dis-
tinct complaints, the committee found that ‘‘in every case
where respondent acted for shareholders directly or through
employment by National Bureau of Corporation Research,
he acted in absolute good faith and with the honest belief
that the shareholders had a just complaint against their cor-
porations, and that in the casc of two of the corporations at
least, respondent instituted legal proceedings and did a great
deal of work in behalf of shareholders’’,

a

706 eee

In its finding (6) the committee found: ‘‘That during the
hearing of this matter, respondent stated to the committee
that he had been engaged in the specialty aforesaid for the
many years aforesaid and had never been criticized in con-
nection therewith nor has it ever been suggested to him that
his practice was not ethical and that if, in the opinion of
the Board of Governors, respondent’s work of investigating
corporations under the circumstances heretofore set forth is
objectionable in the least, he will abandon the practice upon
the suggestion of the Board of Governors.’’

Finding (9) as to the first cause of complaint was as fol-
lows: ‘‘The respondent did collect money, viz., $25. from
Emma A. Hively for legal services and expenses in connec-
tion with an investigation of and legal proceedings instituted
against Coast Tire & Rubber Company, a corporation, and
in the judgment of this committee, there was probable cause
for such investigation. That a part of the money so col-
lected from said Emma A. Hively was paid to the manage-
ment and solicitors of National Bureau of Corporation Re-
search. That no part of the money so collected was returned
to said Emma A. Hively.’’

Finding (10) was as follows: ‘‘That Emma A. Hively was
solicited to join the shareholders of Coast Tire & Rubber
Company by a lay person and later respondent represented
her as her counsel in that matter.’’

As to the third cause of complaint finding (11) was as
follows: ‘‘That respondent did receive money, viz., $875,
from Daniel Lyons for legal services and expenses in con-
nection with an investigation of and legal proceedings in-
stituted against Doble Steam Motors Corporation, a corpo-
ration, and in the judgment of this committee, there was
probable cause for such investigation. That a part of the
money so received from said Daniel Lyons was paid to the
management and solicitors of National Bureau of Corpora-
tion Research, That no part of the money so received was
returned to said Daniel Lyons.’’

Finding (12): ‘‘That said Daniel Lyons was solicited to
join the shareholders of Doble Steam Motors Corporation by
a lay person and that said lay person was connected with the
said National Bureau of Corporation Research, and by em-
ployment, respondent represented such shareholders of Doble

SS tot

Steam Motors Corporation as were solicited by National
Bureau of Corporation Research.’’

Finding (18): ‘‘That with respect to the ‘fifth separate
and distinct complaint’, and the ‘sixth separate and distinct
complaint’, set forth in the Notice to Show Cause, the com-
mittee finds that Lizzie Radford, whose correct name is
Elizabeth Radford, and John Doe Radford, whose correct
name is J. W. Radford, were and are husband and wife
and that they were jointly interested in shares of the capital
stock of Doble Steam Motors Corporation and that the cer-
tificate representing such shares stood in the name of the
husband.”

Finding (14): ‘That respondent did receive money, viz.,
$187.50 from said Elizabeth Radford and J. W. Radford for
legal services and expenses in connection with an investiga-
tion of and legal proceedings instituted against Doble Steam
Motors Corporation, a corporation, and that in the judg-
ment of this committee, there was probable cause for such
investigation. That a part of the money so received from
said Elizabeth Radford and J. W. Radford was paid to the
management and solicitors of National Bureau of Corpora-
tion Research. That no part of the money so received was
returned to said Elizabeth Radford and/or J. W. Radford.
That otherwise the allegations of the sixth count are true.’”’

Finding (15): ‘“‘That said Blizabeth Radford and J. W.
Radford were solicited to join the shareholders of Doble
Steam Motors Corporation by a lay person and that said
lay person was connected with the National Bureau of Cor-
poration Research, and by employment, respondent repre-
sented such shareholders of Doble Steam Motors Corporation
as were solicited by National Bureau of Corporation Re-
search,’?

From the foregoing findings the committee concluded:
“That the respondent, Frank W. Sawyer, committed no act
in violation of the terms, force, effect, meaning and spirit
of the Rules of Professional Conduct adopted by The State
Bar of California or Rule 3 thereof, or the terms, force,
effect, meaning and spirit of section 287 of the Code of Civil
Procedure of the State of California’, and recommended as
follows:

“*(1) That if it is objectionable for a member of the Bar
to organize shareholders of corporations for the purpose of

708 a Ye

representing their interest against the corporation, that re-
spondent be privately reprimanded and instructed to cease
the practice.

“(2) That if it is objectionable for a member of the Bar
to accept employment from any lay organization or person
engaged in the business of organizing shareholders to repre-
sent such shareholders in proceedings against the corpora-
tions, that respondent be privately reprimanded and in-
structed to cease accepting employment from any such lay
organization or persons.

“*(8) That if it is objectionable for a member of The State
Bar to organize such shareholders or to represent such lay
organizations or persons, that the members of The State
Bar be so notified through the State Bar Journal or some
other medium, as there are other members of the Bar en-
gaged in that practice.’

The proceedings, conclusion and recommendation of local
administrative committee No. 4 of the city and county of
San Francisco were duly reported to the board of governors
of The State Bar. In its review of the said proceedings the
board of governors decided to take additional evidence at
which petitioner with his counsel were personally present.
At the conclusion of its review, aided by the additional evi-
dence before it, the board of governors made its own findings
expressly disproving the findings, conclusion and recommen-
dation of local administrative committee No. 4, except as to
such matters found to be true in its own findings. As to the
“second’’? and ‘“‘fourth’’ separate and distinct counts, no
evidence having been introduced in regard thereto, the board
of governors found the said charges to be untrue. As to
the ‘‘first”’, ‘‘third’’, ‘‘fifth’? and ‘“‘sixth’’ separate and
distinct complaints the board found in accord with the local
committee’s findings (a), (b), (¢), (d) and (e) hereinbefore
set out,-and additionally as italicized: ‘‘ (6) That respondent
did collect money, viz., $25. from Emma A. Hively for legal
services and expenses in connection with an investigation of
and legal proceedings instituted against Coast Tire & Rubber
Company, a corporation. That a part of the money so col-
lected from said Emma A. Hively was paid to the manage-
ment and solicitors of National Bureau of Corporation Re-
search. That no part of the money so collected was returned
to said Emma A. Hively. That respondent accepted said

709

employment in said case, knowing that said employment had
been solicited by an employce of said Rescarch Corporation,
and split the money so received in said employment with wn-
licensed persons.’’ That ‘‘there was probable cause for such
investigation’’ was deleted from the local committee’s find-
ing.

Finding (7) of the board of governors is the same as find-
ing (11) of the local committee with the phrase “‘there was
probable cause for such investigation’ deleted.

Finding (8) is the same as finding (12) of the local com-
mittee with the italicized additions thereto: ‘‘(8) That said
Daniel Lyons was solicited to pay said money and to join in
an investigation of Doble Steam Motors Corporation by re-
spondent, by a lay person and that said lay person was
connected with the said National Bureau of Corporation
Research; that by said employment, respondent represented
such shareholders of Doble Steam Motors Corporation as
were solicited by National Bureau of Corporation Research.
That respondent knew when he accepted such employment
that it had been solicited.’

Finding (9) as to the fifth and sixth separate and dis-
tinct complaints is the same as the local committee’s find-
ing (13) with respect to the joint interest of Elizabeth Rad-
ford and J. W. Radford in shares of the capital stock of
Doble Steam Motors Corporation, and that the certificate
stood in the name of J. W. Radford.

Finding (10) as to the receipt of $187 from the Rad-
fords for legal services and expenses in connection with an
investigation of any legal proceedings instituted against
Doble Steam Motors Corporation is the same as the local
committee’s finding (14) with the phrase ‘‘and that in the
judgment of this committee, there was probable cause for
such investigation’? deleted.

Finding (11) rewrites finding (15) of the local committee
to read as follows: ‘‘That said Elizabeth Radford and J. W.
Radford were solicited to pay said money and to join in
said investigation of Doble Steam Motors Corporation and
to employ respondent by a lay person and that said lay per-
son was connected with the said National Bureau of Corpo-
ration Research, and by employment, respondent represented
said Elizabeth Radford and J. W. Radford, and other share-

710 Le 7

holders of Doble Steam Motors Corporation as were solicited
by National Bureau of Corporation Research. That in ac-
cepting such employment, said respondent knew that such
employment had been solicited by employees of agents of
said research corporation.’’

Finding (12) is as follows: ‘‘That respondent directed the
solicitation of the stockholders in the various corporations
and knew at all times that in each case herein mentioned that
such employment was solicited.’’

Finding (13) is as follows: ‘‘That the organization of said
research corporation was not in good faith, but was de-
liberately planned by respondent and said M. J. Anderson
for the purpose of securing professional employment for said
respondent, that in accepting said employment so solicited
the respondent did not act in good faith.’’

From the foregoing findings or statement of facts the
board of governors reached the conclusion that the petitioner
had violated rule 3 of the Rules of Professional Conduct
adopted by The State Bar of California, and recommended
that he be suspended from the practice of the law in the
state of California for a period of six months.

It is apparent from the modification of the findings of
the trial committee that the matter in the minds of the
board of governors had finally resolved itself down to the
question of whether or not a person or persons who are not
stockholders of a corporation have the right to organize
stockholders into a group in conjunction with an attorney
who is actively. participating in the solicitation of stock-
holders to come in and join the litigation, coupled with a
further question as to whether it is legitimate practice, as-
suming that solicitation is proper at all, to take from such
aggrieved stockholders a comparatively large sum of money,
seventy per cent of which does not go toward litigation in
protection of their rights at all, thus differentiating the ques-
tion involved in this investigation from the question of the
admitted right of stockholders to organize and proceed in a
representative capacity, to communicate with other stock-
holders, and to solicit funds from them for the purpose of
protecting their mutual interests in the corporation, the
deciding factor in the contemplation of the board of gov-
ernors being that respondent knew that his employment had
been solicited and its terms arranged for upon a percentage

es m1

basis contrary to the spirit of and inhibition of rule 3 of the
Rules of Professional Conduct.

The petitioner contends there is no evidence to
support finding (12) of the board of governors: ‘‘(12) That
respondent directed the solicitation of the stockholders, in
the various corporations, and knew at all times that in each
case herein mentioned that such employment was solicited.’’
The petitioner, however, admitted the collection of money
and that it was paid to him and came from the members of
the various groups of stockholders that were organized; that
solicitors were sent out to various stockholders; that one
of the purposes of soliciting these stockholders was to bring
business to his office for the purpose of instituting legal pro-
ceedings, if necessary. The petitioner admitted that his
name appeared on the letter-heads of said bureau as counsel;
that the existence of a valid research corporation was repre-
sented to these people; and that of the collections paid to him
as the result of such solicitation petitioner received thirty
per cent and forty per cent went to Anderson and thirty per
cent to solicitors as by Anderson directed. Anderson testi-
fied that he was employed by petitioner to take charge of
the organization work and that petitioner paid the bills.
These admissions and testimony amply sustain the finding
that petitioner knew that such employment was solicited on
a percentage basis, either directly or indirectly.

Petitioner also attacks finding (18) of the board of gov-
ernors to the effect: ‘‘That the organization of the research
corporation was not in good faith, but was deliberately
planned by respondent and said M. J. Anderson for the
purpose of securing professional employment for said re-
spondent; that in accepting said employment so solicited,
the respondent did not act in good faith.” Lack of good
faith may seldom be proved directly, but may be inferred
from circumstances appearing in evidence. Here we have
the circumstances of adjoining offices and a common recep-
tion room as between Anderson, the organizer of the Na-
tional Bureau of Corporation Research, and the petitioner’s
law offices, the name of said research corporation appearing
on the common reception room door; the admission that
Anderson and the solicitors employed by him were in con-
stant consultation with petitioner; that petitioner furnished
Anderson with the names of stockholders to be interviewed

712 Po P|

and solicited; Anderson’s statement that he was compensated
by petitioner, depending upon the amount of work and the
length of time it took; the circumstance that all moneys col-
lected by solicitors were paid first to petitioner and then
disbursed to Anderson and to the solicitors as Anderson di-
rected; the admission that Anderson was considerably in-
debted to petitioner and that practically every solicitor
employed by Anderson owed petitioner money for advances
made to them, hardly seems consistent with petitioner’s claim
that said research corporation was entirely a creation of
Anderson’s, with which he had no concern except to act as
an attorney under its employment, petitioner receiving thirty
per cent of moneys collected, and said research corporation
and its employees receiving the balance of seventy per cent,
and it would be difficult to hold under the evidence before
the board of governors that entire good faith characterized
petitioner’s connection with said National Bureau of Corpo-
ration Research, and that the relation existing between peti-
tioner and said Anderson, its purported organizer and
manager, was purely that of client and attorney.

HI The solicitation of business by members of the legal
profession has always, at least historically, been deemed un- ,
ethical, and is expressly prohibited by rule 2 of the Rules of
Professional Conduct of The State Bar of this state. The
petitioner admits that there was solicitation and that he had
knowledge of it, but asserts ‘‘that the solicitation was for
the purpose of organizing stockholders likewise interested
into a group for mutual protection and benefit.’’

‘We feel that in the light of the decided attitude taken by
The State Bar and approved by this court as expressed in
the recent cases of Townsend v. State Bar, 210 Cal. 362 [291
Pae. 837]; Shaw v. State Bar, 212 Cal. 52 [297 Pac. 5382];
Smallberg v. State Bar, 212 Cal. 113 [297 Pac. 916]; Howe
v. State Bar, 212 Cal. 222 [298 Pac. 25]; Dahl v. State
Bar, 213 Cal. 160 [1 Pac. (2d) 977]; Recht v. State Bar,
218 Cal. 352 [23 Pac. (2d) 273], the disciplinary recom-
mendation of the board of governors is justified and should
be upheld by this court.

In fairness to petitioner it should be stated that while the
board of governors went to some extent into the reasons for

“the apparent delays in bringing actions and in not having
reached a definite conclusion in any of the matters here

Ce] 113

under investigation, the petitioner points out, plausibly at
least, that he believed he had good causes of action in pro-
tection of the rights of minority stockholders but that no
adequate results could be obtained in a representative stock-
holders’ suit and that the only effective means of securing a
recovery against wrongdoing directors was by a jury trial;
that he believed that minority stockholders had a constitu-
tional right to a trial by jury; that he had attempted to
test this right in one case and had unsuccessfully sought a
writ of mandate from this court to compel the superior
court to grant a trial by jury; that he had thereupon gone
to trial, demanded a jury, been refused a jury trial, and
had then offered no evidence, and the defendants doing like-
wise judgment necessarily went for the defendants; that an
appeal had been taken from the order denying the demand
for a jury trial and that such appeal is now pending in this
court and undecided, and is intended to be a test of the
question of whether or not a minority stockholders’ suit may
be prosecuted by an action at law.

The conclusion of the board of governors that the peti-
tioner has violated rule 3 of the Rules of Professional Con-
duct of The State Bar is approved. The recommendation
that the petitioner be suspended from the practice of the
law in the state of California for a period of six months is
modified to provide for suspension for a period of three
months, which order of suspension is to date from and after
thirty days of the entry of this order, and it is so ordered.

LANGDON, J., Dissenting.—I dissent as to the punish-
ment. The local administrative committee was uncertain as
to whether the acts complained of were improper, as shown

- by their recommendations, and they found that petitioner
did not act in bad faith. They recommended that if his
actions were objectionable he be privately reprimanded. We
hold that they are objectionable, and I am disposed to follow
their récommendation. I believe that a mere suggestion to
petitioner that he desist from the practices herein found ob-
jectionable would be followed promptly. A reprimand is, in
my judgment, the extreme penalty justified by the facts.

m4 es —

[L. A. No, 18262, In Bank—May 8, 1934]

HORACE SESSIONS et al., Respondents, v. HERMAN H.
TROTT et al. Appellants.

Franklin W. Peck, Arthur L. Erb and Richard C. Waltz
for Appellants.

a | 715

Rosecrans & Emme and B. R. Rountree for Respondents.

CURTIS, J.—This action was brought by the plaintifis
to recover damages for fraudulent representations made by
defendants as to the boundaries of a lot which the defend-
ants conveyed to the plaintiffs in exchange for property
owned by the plaintiffs. Plaintifis and defendants entered
into negotiations for the exchange of respective properties
owned by each. The property of defendants consisted of
lot 49 of tract 9159, upon which an attractive two-story
stucco residence worth from $18,500 to $20,000 had been
built. Said property was located on Talmadge Street near
Los Feliz Boulevard in the city of Los Angeles. Plaintiffs’
property was also residence property in Los Angeles. Lot
49 of tract 9159, as shown on the plat of the district in
the office of the Los Feliz Knolls tract office, was an irregular
shaped hillside lot with an actual frontage on Talmadge
Street of 49.89 feet. The west boundary line measured 82.38
feet, the eastern boundary line measured 80.67 feet, and
the rear line approximately 82.51 feet. The lot had been
landscaped with grass and shrubs and a sprinkling system
had been installed. However, through an error of the
gardener—it is not claimed that it was deliberately and
purposely done by the defendants—a wide strip of the lot
adjoining on the west had been landscaped as part of lot 49,
and even part of the sprinkling system had been installed
thereon. This strip of land of the adjoining lot so land-
seaped measured 17 feet on Talmadge Street and tapered
to 7 feet in the rear. The adjoining lot was vacant and
covered with sand and weeds so that it appeared to a casual
observer that lot 49 had a frontage of 66.89 feet on
Talmadge Street. Photographie exhibits of the house taken
from the front and from the rear show that the actual prop-
erty line cuts across in front of the house and even cuts
off a portion of the stepping-stones laid from the curb to
the front door, with the result that the house which is a
large one is out of proportion to the lot upon which it is
built.. In fact, the map shows that one corner of the break-
fast room ig within three feet of the property line. The
plaintiffs claimed that, at the time they °were examining
the property for the purpose of deciding whether they

716 ee —

wished to make the exchange, the defendant, Mr. Trott,
as they stood at the rear of the lot, pointed out the west
line of the property as being along the line landscaped and
indicated a string which marked the line as it was land-
scaped as being the property line. This testimony was cor-
roborated by a disinterested witness who was also present.
These representations were made by the defendant Mr.
Trott, and his wife, named as the other defendant, was not
present. The defendant denied that he had so indicated the
property line, and testified that he had pointed out a poplar
tree, which was very close to the actual property line as
marking the property line in front. Plaintiffs further testi-
fied that they did not at any time prior to the exchange see
the tract map in the tract office for the reason that the
defendant had asked them not to contact the tract office as
he wished, as owner, to conduct the negotiations himself.
Two experts testified in behalf of the plaintiffs as to the
difference in value between the property as represented by
defendants and the actual value of the property. One gave
his opinion that the difference in value amounted to $5,625,
and the other that it amounted to $6,750. The trial court
decided in favor of the plaintiffs, and as a conclusion of
law held that they were entitled to recover of the defendants
the sum of $3,500. Judgment was accordingly entered.
Subsequently, a motion for a new trial was made upon
the ground of newly-discovered evidence, and affidavits were
introduced by defendants to the effect that one of the selling
agents at the tract office had shown to both the plaintiffs
the map of the tract in the office prior to the exchange of
properties. It would, of course, follow, if this were true,
that the plaintiffs were not entitled to recover, since in
making the exchange they were aware of the actual dimen-
sions of the lot and did not exchange their property in
reliance upon the misrepresentations of the defendant.
These affidavits were met with counter-affidavits of plain-
tiffs denying that they ever saw such map prior to the
exchange and affirming that the only time they saw said map
was several months subsequent thereto when they first be-
came aware of the fraud practiced upon them. The motion
for a new trial was denied.

Defendants appeal from the judgment so entered upon
the following grounds: (1) That the trial court erred in

Ye | 117

failing to find the plaintiffs were injured by the misrepre-
sentations or the amount of damage suffered by them,
(2) that the judgment was excessive, and (8) that the trial
court erred in denying their motion for a new trial.

TH It is true that the findings are defective in that there
is not any finding as to injury to plaintiffs, or as to the
amount of damages suffered by them, which were material
issues. There are findings, however, against defendants as
to wilful and fraudulent representations made by defendant
Trott to the plaintiffs, and the belief of the plaintiffs in
such misrepresentations and their reliance upon them. And
the conclusion of law, as before noted, is to the effect, ‘‘That
the plaintiffs are entitled to recover of and from the defend-
ants the sum of Three Thousand Five Hundred ($8,500)
Dollars, together with their costs of suit.’”’ It is apparent
that the trial court through inadvertence failed to make a
finding to the effect that the plainntiffs were injured by
the misrepresentations of the defendant, and to embody in
the findings the statement found in the conclusion of law
that the damages amounted to $3,500. Under section 434
of article VI of the Constitution and section 956a of the
Code of Civil Procedure, this court is empowered to make
findings of fact in addition to those made by the trial court.
Prior to the enactment of this constitutional provision and
the code section in 1927, it was the rule that if the trial
court failed to find upon a material issue, the appellate
court had no option but to reverse the judgment and send
the case back to the trial court. Needless to say, the
authorities decided prior to these enactments are all to that
effect. In an effort to expedite justice, section 434 of
article VI of the Constitution, and section 956a of the Code
of Civil Procedure were enacted with the primary purpose
of abrogating the rule that when the court failed to find
upon a material issue the decision was against the law and
the judgment or order was required to be reversed. (Z'up-
man v. Haberkern, 208 Cal. 256 [280 Pac. 970].) Since
their enactment there are numerous authorities upholding
the exercise of this power. (Lewin v. Pioneer Hatchery, 99
Cal. App. 473 [278 Pac. 902]; Allee v. Shay, 92 Cal. App.
749 [268 Pac. 962]; Kirk v. Culley, 202 Cal. 501 [261 Pac.
994]; Linberg v. Stanto, 211 Cal. 771 [297 Pac. 9, 11, 75

718 Le 7

A. L. BR. 555].) We are satisfied that this is a proper
ease for the exercise of such power. In the case of Linberg
v. Stanto, supra, the trial court failed to expressly find
as to the damages suffered by virtue of plaintiff’s injuries
in an automobile accident, but, as a conclusion of law,
ordered judgment to be rendered against defendant in the
sum of $1509. This court refused to reverse the judgment,
saying: ‘It is well settled in spite of the fact that section
638 of the Code of Civil Procedure provides that facts and
conclusions must be separately stated, that a finding may
be regarded as one of fact, although mistakenly placed
among the conclusions of law.’? In pursuance, therefore,
of the power conferred by said code section, we hereby find
that the plaintiffs herein were damaged in the amount of
$3,500. And from the record before us, there can be no
other conclusion but that plaintiffs were injured by the false
and fraudulent representations of the defendant, and we
hereby find: ‘‘It is true that plaintiffs suffered injury by
reason of the false and fraudulent representations of the
defendant Trott as to the property line of said lot.’’ It
may be argued in reference to a hypothetical case that as
damages for deceit in the sale of property are the difference
between the actual value of the property and its value as
it has been represented, it is conceivable that, notwith-
standing the deceit practiced by a vendor and the reliance
by the vendee upon the false representations made, the
actual value may turn out to be as much or more than it
would have been had the representations been true. It will
suffice to say that such a hypothesis is conclusively con-
tradicted by the record before us. The photographie ex-
hibits in the case demonstrate beyond cavil that plaintiffs
were ‘injured in failing to receive as large a lot as that
which they had a right to expect they would receive.

HM These photographic exhibits also demonstrate that
the damages suffered by plaintiffs were considerably greater
than the mere area of the strip would indicate. As before
noted, the exclusion of the 17 feet frontage from the lot
has the result of making the house seem too large for the
lot, and the lot instead of being practically rectangular in
shape, is in fact a queer irregular shape. As before in-
dicated, one expert, a court appraiser, testified that the

; Po 719

difference in value amounted to $5,625, and the other expert,
a real estate broker, testified that the difference amounted
to $6,750. The defendant Trott had testified that the differ-
ence would not amount to more than $200. The property
was viewed by the trial judge, evidently with the consent
of the parties, and as indicated by the conclusion of law,
it is apparent that in his opinion the difference in value lay
somewhere between the estimate of the experts and the opin-
ion of Trott, or $3,500. We are satisfied that $3,500 is a
fair estimate of the damages suffered by plaintiff.

“It should perhaps be pointed out that the damages in
this case are made up of only one item, whereas in the
ease of James v. Haley, 212 Cal. 142 [297 Pac. 920], relied
upon by appellant, several items of special damages were
pleaded. The decision of the latter case that the appellate
court would not adopt a conclusion of law to the effect
that the plaintiff was damaged in a certain sum as a find-
ing of fact, therefore, is not decisive of this case. The court
there had no way of segregating the various items of special
damages, and moreover, as pointed out in the opinion, it
developed that three of the items of damages were not suf-
fered by plaintiff, suing in his individual capacity, as an
individual, but were losses suffered by a partnership of
which plaintiff was a member. As the plaintiff as an in-
dividual was not entitled to recover for damages suffered by
the partnership, a segregation of the items would have
been imperative, and the court properly refused to take
over the duties of the trial court.

HH The motion for a new trial was heard and deter-
mined by the same judge who had presided during the trial
of the case. The showing of defendants that due diligence
had been used in an attempt to procure the testimony of
the salesman at the tract office is very weak. Despite the
fact that defendant Trott must have been aware that sales-
men were employed at the tract office, the only person he
interrogated prior to the trial of the case was the man in
charge of the office, and apparently he did not request the
manager to ascertain whether any of the salesmen had any
knowledge of the affair. Evidently the trial judge was of
the opinion that even if the testimony set out in the affidavits
presented by defendants were produced upon a new trial,

720 Ss —

his decision would be the same. We find no abuse of
discretion.
The judgment is affirmed.

Preston, J., Waste, C. J., Shenk, J., Langdon, J., and
Seawell, J., concurred.

Rehearing denied.

[L. A. No, 14856. In Bank—May 9, 1984.]

LELAND 8. HAMER et al., Respondents, v. J. WARREN
MacCLATCHIE et al., Appellants.

Ee 121
a

Henry 8. Richmond, Irvin L. Fuller, Buler & Subith and
Fred E. Subith for Appellants.

Evans, Pearce & Campbell and Wilbur Bassett for Re-
spondents. .

PRESTON, J.—This cause, submitted upon motion of
plaintiffs to dismiss defendants’ appeal or to affirm the
judgment, may be disposed of by a brief discussion leading
to adoption of the latter course. The word ‘‘plaintiff’’
will refer to plaintiff Hamer, the coplaintiff being his as-
signee of a part interest in the cause. The word ‘‘defend-
ant’’ will refer to the defendant J. Warren MacClatehie.

About July 9, 1923, plaintiff, an inventor of oil-well tools
and machinery, filed a patent application No. 650,289, for a
mechanical device known as a tong puller to break joints in
well-drilling drill pipe, the full assembly thereof comprising
a cam and ecathead, together with a bar, bearing slide and
a pulling line. He exhibited his plans to defendant and
conferred with him relative to possible manufacture and
marketing of the device. These negotiations bore no fruit.
Later, about November 18, 1925, defendant filed an applica-
tion for letters patent, No. 69,731, on a similar apparatus.
In January, 1926, plaintiff told defendant that claims had
been allowed on his patent application of such breadth and
scope that defendant’s device would infringe them and he
permitted defendant to inspect his patent file. After exam-
ining the patent papers, defendant, concurred in plaintitf’s

a

722 EE Ye

view. Soon thereafter, and on January 16, 1926, these
parties executed the written contract which forms the basis
of this action.

Said contract recited that plaintiff had made application
for a patent as aforesaid and that defendant was engaged
in the manufacture of various mechanical devices and oil-
well appliances and was desirous of securing the sole right
to manufacture and sell plaintiff’s device under the patent
throughout the United States; that, therefore, plaintiff
granted to defendant the sole right to manufacture and
sell said invention covered by said patent application during
the term of patent and defendant agreed, in consideration
of said right, to use every reasonable endeavor to intro-
duce the device into general use and promote its manu-
facture and sale and to pay plaintiff, for each device or
part thereof sold, a royalty of ten per cent of the gross
selling price. The contract then provided: ‘‘Whereas, the
party of the second part (plaintiff) agrees to cooperate
with and render whatever assistance is‘necessary respecting
the mode and use of said device, and that they further
agree to turn over any and all improvements of said in-
ventions, invented or devised by any either or all of them
collectively or individually, such improvements to be for the
benefit of all the parties herein mentioned, and it is also
agreed between the parties hereto that there will be no
additional royalties paid for any improvements or additions
to said Hamer Tong Pulling device, such royalty to remain
as herein before mentioned... . ”’

Letters patent were subsequently issued on the respective
applications, to defendant on June 28, 1927, and to plain-
tiff on August 22, 1932. At the time plaintiff’s application
finally ripened into a patent, it appeared that a number of
the claims theretofore allowed him had been withdrawn,
leaving grave doubt as to whether the claims finally em-
bodied in the patent were broad enough to cover defendant’s
invention. Defendant, however, continued to pay royalties
to plaintiff under the contract until July 9, 1928, after which
date he refused to make further payments.

Plaintiff thereafter brought this action for an accounting
and recovery of unpaid royalties, praying also that said
contract be decreed in full force and effect, with defendant’s
patent held in trust for both parties. Defendant answered

ee 728

setting up claims of mutual rescission, failure of considera-
tion and breach of warranty. The cause was tried before
the court sitting without a jury. Voluminous evidence was
received and the court made findings and gave judgment for
plaintiff substantially as prayed, including an award of
$11,987.45 on the accounting. Defendant appealed. He has
filed an opening brief and a longer supplemental brief,
urging numerous grounds for reversal of the judgment.
We will pause to discuss only those contentions deemed
most important.

HE Appellant’s first contention is that the contract was
terminated and canceled upon his receipt of a letter, dated
October 4, 1928, from Mr. William H. Maxwell, demanding,
on behalf of plaintiff, that appellant continue the royalty
payments and concluding with the statement: ‘‘Unless the
royalties .. . are forthcoming immediately, the Agreement
will, of course, terminate in which event suitable action will
be taken to recover all amounts due.’’ Appellant testified
that after receiving this letter he had a telephone conversa-
tion with plaintiff, at which time he advised plaintiff that
he considered the contract ended and would confirm the
cancellation by letter, which letter he wrote on May 13,
1929.

The Maxwell letter is not in evidence. It was
marked for identification only and objection to its admission
was sustained. We find no prejudicial error on the part of
the court below in making this ruling. The evidence showed
that the writer was not an attorney, but a patent solicitor
for plaintiff and that he had no authority whatsoever to
make the statement above quoted. Moreover, it can scarcely
be construed as a notice of cancellation or rescission, being
clearly intended in the nature of a threat to induce further
payment of royalties. It will be noted that appellant’s so-
called confirmatory letter was not written until more than
seven months had elapsed from the date of the Maxwell
letter. Plaintiff denied cancellation or rescission of the con-
tract by telephone conversation, letter or in any other man-
ner and the trial court found for him on this issue. Such
finding is supported by persuasive evidence. And we may
here add that there is in the record abundant support also
for all of the other findings of the trial court.

74 es =

| | Secondly, appellant contends that there was a fail-
ure of consideration because he was induced to enter into
the contract solely upon the representations of plaintiff that
if his device infringed plaintiff’s claims and patent, said
claims would be made the basis of an infringement suit;
but that the claims were not supported by the letters patent
subsequently issued and hence there was a failure of con-
sideration. And it is further urged that the court erred
in refusing to admit testimony, covered by appellant’s offer
of proof, showing a marked distinction between plaintiff’s
invention and the device being manufactured by appellant.
Appellant testified that he was not manufacturing the device
which he saw in 1923, or any device sufficiently similar
thereto to charge him with payment of royalties to plain-
tiff. Plaintiff’s evidence was in direct contradiction of this
statement.

The above contentions are untenable. We agree with the
court below that the language of the contract is clear and
not ambiguous. It sets forth the mutual agreement of
these parties to co-operate and work together in an endeavor
to perfect the device and improvements thereto and to
manufacture, market and introduce it into general use. In
other words, it is clear that the parties were contracting to
“*pool’’ their inventive ideas with respect to the device and
it therefore became immaterial, after execution of the con-
tract, whether the desired claims were allowed under the
one patent or the other, or in which name the patent stood,
or how far the finished product varied from the original
invention. What other import could the language above
quoted have: ‘‘That they further agree to turn over any
and all improvements of said inventions, invented or devised
by any either or all of them collectively or individually,
such improvements to be for the benefit of all the par-
ties... 77? There is no special meaning of the word
‘improvements’? in the patent law which would compel a
construction of said provision as unecrtain or ambiguous.
Furthermore, the evidence shows that the plans and ideas
of these parties were freely exchanged for their mutual
benefit. It fully justifies the finding that, under the terms
of the agreement, the patent issued to defendant was held
in trust by him for the benefit of both parties.

ee 125

Prior to execution of the contract appellant had full op-
portunity to make a thorough study of plaintiff’s application
and allowed claims. This examination led him to believe
that his device might infringe the patent granted to plain-
tiff. He could have pushed his own invention on the chance
that plaintiff’s claims would be withdrawn, but he chose
the safe course of contracting for a license under the claims
then allowed plaintiff and any patent subsequently issued
thereon. Appellant received the protection for which he
contracted. The final action of the patent office on plain-
tiff’s application therefore had no bearing on the issue of
consideration. It might well have been that plaintiff ceased
to act in the interest of any or all of his own claims in order
to leave appellant free in furthering his application, in view
of the contract which united the inventions and ideas of
either one of them for the benefit of both.

|| The above remarks dispose of appellant’s further
specification that the failure of plaintiff to secure a patent
allowing him his said broad claims constituted a breach of
warranty. The contract contained no such warranty and
the court properly found there was none. Appellant’s fur-
ther contentions relating to alleged errors on the part of
the court in the rejection of evidence, in interpretation and
construction of said contract, etc., have also been sufficiently
disposed of by the above discussion.

The judgment is affirmed.

Curtis, J., Shenk, J., Langdon, J., and Waste, C. J.,
concurred.

[Sac. No, 4769. In Bank—May 9, 1934.]

WILLIAM FULTON, Respondent, v. LOUISA J. FULTON,
Appellant.

a a Te
eS
T. B. Scott for Appellant.

Alfred Aram for Respondent.

SHENK, J.—The plaintiff sued the defendant for a
divorce on the ground of desertion. The complaint alleged
that the community property consisted of furniture of the
value of about $100 and shares of stock in the Cities Service
Company of about $250 in value. The defendant answered
denying the desertion, putting in issue the question of the
extent of the community property, and filed a cross-com-
plaint for separate maintenance. The trial court granted
an interlocutory decree of divorce to the plaintiff; awarded
to the defendant said shares of stock; awarded to her a
one-half interest in eighty acres of land in Denair Land
and Development Company’s Colony No. 2, and denied to
her other relief. She appealed from the interlocutory de-
eree and challenges the findings of the court both on the
issue of desertion and on the division of property. The
plaintiff moved to dismiss the appeal for noncompliance
with section 2 of rule VIII of the rules of court, and to
affirm the judgment under section 3 of rule V. Thereafter
the defendant filed a supplemental brief and the respond-
ent’s brief has been filed. The appeal has been submitted
on its merits,

It is unnecessary to recount the evidence at length.
On both of the major issues it was conflicting. The trial
court resolved the conflict in favor of the plaintiff. It is
insisted that the evidence of the plaintiff on the question
of desertion is not corroborated. The circumstances of the
separation and the continuance thereof as disclosed by the
defendant’s testimony may be taken into consideration for
purposes of corroboration. (Percy v. Percy, 188 Cal. 765

728 Le 7

[207 Pac. 369]; Jansen v. Jansen, 127 Cal. App. 294 [15
Pac. (2d) 777].) It is not disputed that the defendant
left the plaintiff’s house in Stanislaus County in September,
1928, and went to Arizona. She returned to this state in
1929, but did not return to her former home. According
to the testimony of her sister she lived with the sister in
Turlock until the trial of the action in January, 1932. The
defendant contended that she was compelled to leave the
plaintiff because of the latter’s alleged misconduct toward
her. On this question there was contradictory evidence and
much dispute, and the trial court’s finding thereon cannot
be disturbed. :

HM The question of the extent of the community prop-
erty in existence at the time of the trial required an exten-
sive examination into the amount and character of property
owned by the plaintiff at the time of the marriage of the
parties. The plaintiff owned property of considerable value
at that time. After the marriage it had undergone trans-
mutation and it was necessary for the court to trace the
original investments and the income thereof through the
years of married life in an endeavor to segregate the com-
munity property and divide it equally as provided in sec-
tion 146 of the Civil Code. Evidence in detail was taken on
this subject. On this record it cannot be said that the find-
ings of the court are without support. [J The point
is made that the decree made no division of the household
furniture. While it is true that no specific reference is
made in the decree to the household furniture, the defend-
ant testified that after her return from Arizona she went
to the home and took away her personal effects and at
other times received articles of furniture from the plaintiff.”
The extent or value of what was received and what remained
is not disclosed by the evidence, and it must be assumed
that it had theretofore been divided in a manner satisfactory
to the parties or was so negligible as not to require special
order. yo .

[| No prejudice is shown to have resulted to the de-
fendant by reason of the court’s requirement that she first
proceed with proof of the allegations of her cross-complaint.

After the entry of the interlocutory decree and after
the filing of the notice of appeal, the defendant moved the
court for an allowance of attorney fees and costs on appeal.

Le 729

The record does not show that the motion was acted upon.
Assuming its denial, no appeal was taken from the order.
As a special order after final judgment (see Bancroft v.
Bancroft, 178 Cal. 367 (178 Pac. 582]), it was appealable
(see. 963, Code Civ. Proc.), and as such is not subject
to review on an appeal from the judgment. (Sec. 956,
Code Civ. Proc.)
The judgment is affirmed.

Thompson, J., Curtis, J., Preston, J., Langdon, J., and
Waste, C. J., concurred.

[Grim. No. 3728, In Bank—May 9, 1934]

In the Matter of the Application of WALTER J. VICTOR,
for a Writ of Habeas Corpus.

730 Le Ls

John F. Groene for Petitioner.

Arthur T. George, Ira H. Rowell and Roderick B. Cassidy
for Respondent.

SHENK, J.—The petitioner was found guilty by the rail-
road commission of a violation of an order of the commis-
sion and was ordered punished by a fine of five hundred
dollars and by five days imprisonment in the county jail
of Los Angeles County. It was further ordered that in
case of default in payment of the fine the petitioner be com-
mitted to said county jail until the fine be paid or satisfied
in the proportion of one day’s imprisonment for each five
dollars of the fine. The order became final. The petitioner
served the five days in jail and was thereupon released
from custody. Thereafter, the commission issued a supple-
mental order of attachment of the body of the petitioner
and his commitment to said county jail until the fine be
paid or satisfied, such imprisonment not to exceed one day
for each five dollars of the fine. Pursuant to this order the
petitioner was again taken into custody. In this proceeding
he contends that the portion of the original order of the
commission requiring imprisonment in default of the pay-
ment of the fine and the supplemental order to the same
effect were beyond the power of the commission and void.

The Constitution provides in section 22 of article
XII that the commission shall have power to punish for
eontempt ‘‘in the same manner and to the same extent as
courts of record’, Section 81 of the Publie Utilities
Act is to the same effect. Section 1218 of the Code of Civil
Procedure provides that the court or judge must determine
whether the person proceeded against is guilty of the con-
tempt charged, ‘‘and if it be adjudged that he is guilty of
the contempt, a fine may be imposed on him not exceeding
five hundred dollars, or he may be imprisoned not exceeding
five days, or both’’.

TH It is established in this state that a superior court
in imposing a fine for contempt has the power to make and
enforce a judgment providing that in default of payment
the party in contempt be imprisoned until the fine be satis-
fied (Ex parte Abbott, 94 Cal. 333 [29 Pac. 622]), notwith-

ee 131

standing such term of imprisonment may exceed five days.
(Bx parte Karlson, 160 Cal. 878 [117 Pac. 447, Ann. Cas.
1912D, 1334].)

HI It seems to be the position of the petitioner that
since the commission imposed a term of imprisonment, it
divested itself of the power, in also imposing the fine, to re-
quire imprisonment in case of default in payment of the
fine. Assuming that the rule contended for is applicable to
judgments in criminal cases (see 8 Cal. Jur. p. 471, and
cases cited), it is not the rule in contempt proceedings. De-
cisive precedent and authority for the order of the commis-
sion, contrary to the petitioner’s contention, is found in In
re Jorgensen, 19 Cal. App. 217 [124 Pac. 1055], and in In re
Mason, 69 Cal. App. 598 [232 Pac. 157].

The writ is discharged and the petitioner is remanded.

Thompson, J., Curtis, J., Preston, J., Langdon, J., and
Waste, C. J., concurred.

[L. A, No, 18575, In Bank—May 9, 1934]

EVA G. McMICKENS, Appellant, v. JAMES T. McMICK-
ENS, Respondent.

732 Le 7

Jackson Hayes for Appellant.

M. OC. Spicer for Respondent.

SHENK, J—Appeal from a judgment entered on an
order sustaining a demurrer to the plaintiff’s complaint
without leave to amend.

From the complaint it appears that in March, 1928, the
plaintiff sued the defendant for divorce on the ground of
extreme cruelty; that the parties entered into a property
settlement agreement including an agreement for the plain-
tiff’s custody of the seven year old son of the parties and
for the payment by the defendant of the support and educa-
tion of said child; that the court entered its interlocutory
decree adjudging the plaintiff entitled to a divorce and
adopting the provisions of the property settlement agree-
ment between them. The agreement and the decree pro-
vided for the payment by the defendant to the plaintiff of
the sum of $30 monthly for the care, maintenance and
“ordinary public schooling’”’ of said minor child until he is

_ twenty-one years of age, and, in addition, such other and
further sums as may be necessary, right and proper on
account of the ‘‘higher education’’ of said child, whether
it be at boarding or military school, or otherwise, until he
arrives at the age of twenty-one years, but not to exceed
$1200 per year for such additional expense. The inter-
locutory decree has become final. It also appears that the
defendant paid the expenses of the child’s schooling in a
military academy in the fall and winter of 1928-1929, but
that he refused to make any further payment on account
of such expenses; that on a return to an order to show cause
the court ruled that such schooling was not the ‘‘higher
education’’ for which the defendant was obligated under the
terms of the agreement and the decree.

It is further alleged that in September, 1929, the plain-
tiff commenced an action in thee Superior Court in and for

es 138

Los Angeles County, numbered ‘287,107, for the reformation
of said agreement and decree to accord with the true intent
and understanding of the parties. It is alleged in the com-
plaint in said action, in addition to the foregoing intro-
ductory facts, and in the complaint in the present action,
that during the negotiations respecting the settlement of
the property rights of the parties in the pending divorce
action, they reached an oral agreement that beginning in
the fall of 1928 the minor child should be entered in some
military or other boarding school to be selected by the
plaintiff and should continue in such school until his en-
trance into some college or university; that the defendant
agreed to pay to the plaintiff $30 a month to be used in
maintaining a home for the child during his homecomings
and for his general care and maintenance, but that the
defendant in addition would pay the expenses of attendance
at military or boarding school beginning at said time not
to exceed $1200 per year; that through the inadvertence of
her attorneys the agreement was not so expressed, but that
the plaintiff believed at all times that the agreement to pay
for military and boarding school from that time as well
as during his high school and college years was expressed
by the language used in said agreement.

Allegations respecting the mutuality of the mistake made
by the parties are included in both complaints. In action
No. 287,107 and in the present action the plaintiff asked
for reformation of said agreement to accord with the alleged
true agreement of the parties. In addition, in the present
action, the plaintiff sought a judgment interpreting the
agreement and declaring the respective rights and duties
of the parties pursuant to said agreement and said inter-
locutory decree.

The complaint in the present action alleges further that
the defendant interposed a demurrer to the complaint in
said action No. 287,107 on the special grounds, in addition
to general grounds, that the matters sought to be adjudicated
thereby had theretofore been adjudicated in the divorce
action between the parties, and that said complaint was an
unauthorized collateral attack upon such judgment. The
complaint herein shows that a judgment of dismissal of said
action No. 287,107 was entered upon an order sustaining

734 EE 7

said demurrer without leave to amend. That judgment has
become final.

All of the foregoing instruments, pleadings and judgments
are made a part of the complaint in the present action.

The defendant interposed his demurrer to the present com-
plaint on the ground, among others, that it appeared on the
face thereof that all of the matters sought to be adjudicated
have heretofore been adjudicated in said divorce action and
in said action No. 287,107. Whereupon the order was made
upon which the present judgment of dismissal was entered.

No error was committed by the order sustaining the
demurrer without leave to amend. Any consideration of
the merits of the plaintiff’s position in the controversy has
been foreclosed by the entry of the judgment of dismissal
in the action numbered 287,107. The judgment entered in
that action ‘‘is conclusive of everything necessarily deter-
mined by such judgment’’. (Peterson v. Weissbein, 75 Cal.
174, 177 [16 Pac. 769, 770], quoting from Freeman on
Judgments, sec. 267; 15 Cal. Jur. 124, 126.) The question
whether the agreement was open to the interpretation con-
tended for by the plaintiff, and the question whether under
the facts stated in that complaint, which are the same facts
alleged in the present complaint, the plaintiff was entitled
to any relief by reformation, were necessarily involved in .
and determined adversely to the plaintiff by the judgment
there.

HM The plaintiff contends that nevertheless she is en-
titled to a consideration of the merits of her cause of action
for declaratory relief. The complaint, however, shows that
no controversy exists between the parties as to the defend-
ant’s duties and liabilities under the agreement between the
parties for the additional expense involved in the child’s
education when he enters high school. The disagreement
resulted from the use of the phrases “ordinary publie school-
ing” and “‘higher education’? appearing in said agreement
and said decree. No claim is made that the ordinary mean-
ing of those phrases-as so used is not the meaning ascribed to
them by the defendant.

It therefore appears that all questions respecting the inter-
pretation of said agreement and said decree as to which
there is a dispute have been foreclosed by the judgment in

es =:

the former action, and that the demurrer was properly sus-
tained.
The judgment is affirmed.

Thompson, J., Curtis, J., Preston, J., Langdon, J., and
Waste, C. J., concurred.

[L. A. No, 14540, In Bank—May 14, 1934.]

OLIVER MAILHES, Appellant, v. INVESTORS SYNDI-
CATE (a Corporation) et al., Respondents.

C. M. Johnson for Appellant.

Daniel E. Farr and W. Torrence Stockman for Respond-
ents.

PRESTON, J.—This judgment-roll appeal by plaintiff
from judgment for defendants, in an action to declare the
right of possession of certain real property occupied by
plaintiff and his ‘wife, has been submitted on motion to dis-
miss the appeal or affirm the judgment. The several con-
tentions of appellant appear to be entirely without merit.
The word ‘“‘defendant’’ will be used to refer to defendant
and cross-complainant Investors Syndicate, a corporation.

The premises in question were conveyed to defendant by a
grantor who had purchased them at a sale of foreclosure
under a deed of trust and defendant, prior to commencement
of this action, had successfully prosecuted to final judgment
an unlawful detainer action against plaintiff’s wife. In his
complaint herein plaintiff alleged that he was in possession
of the property and oceupied it by virtue of an untermi-
nated lease from the former owner, who was trustor under
the above-mentioned deed of trust. He prayed for and was
granted a preliminary restraining order preventing defend-

es

ants from occupying the property under writ of possession
issued in said unlawful detainer action against his wife. He
further prayed for a permanent injunction and for a decla-
ration of his rights and duties in the premises. Defendant
answered setting up its ownership of the property and also
eross-complained to quict title thereto. Later, upon hearing,
the preliminary restraining order was discharged and a
temporary injunction was denied plaintiff. The cause then
proceeded to trial and the court thereafter rendered its
findings that defendant was in fact the owner of the prem-
ises; that the sale under the deed of trust was duly and
regularly made; that the tenancy of plaintiff had termi-
nated; that he had no interest in said premises and was not
entitled to possession thereof. Judgment followed for de-
fendant, quieting its title to the property, and plaintiff
appealed on the judgment-roll alone.

Appellant’s first contention is that the court erred
in dissolving the temporary restraining order and in denying
his request for a temporary injunction, because the allega-
tions of his complaint were sufficient, against the denials
of defendant on information and belief, to show that he was
rightfully in possession and entitled to quiet enjoyment of
the property. This claim has no virtue, not only because
the appeal has been prosecuted upon the judgment-roll alone,
which does not contain a copy of said temporary restraining
order, or the order dissolving it and denying an injunction
pendente lite, or show the proceedings which resulted in the
latter ‘order, but also because any question of the propriety
of said action of the court below has become moot by reason
of the trial of the cause on its merits and entry of judgment
denying a permanent injunction. (People’s Ditch Co. v.
Foothill Irr, Dist., 103 Cal. App. 821 [284 Pac. 514].)

[| Secondly, appellant states that the findings of fact
do not sustain the judgment. This assertion is apparently
founded upon the theory that actions of unlawful detainer
and actions to quiet title may be concurrent; that defendant
had an election of remedies and by securing judgment in
the unlawful detainer action against plaintiff’s wife, it
elected to pursue that remedy, and consider her as the party
holding over under section 1161a of the Code of Civil Pro-
cedure, being thereby precluded in this cause from inter-
posing a defense or cross-complaint to quiet title. This

138 es

claim scarcely warrants discussion. The fact that defendant
brought an unlawful detainer action against one person cer-
tainly did not estop it from defending and quieting its
title against the claims of another person, despite the rela-
tionship of these two persons.

HH The doctrine of election of remedies is regarded as
an application or extension of the law of estoppel and it is
founded upon the theory that a party should not be allowed
to occupy inconsistent positions (10 Cal. Jur., see. 1, p. 3).
As stated in 20 Corpus Juris, p. 12, sec. 9, B: ‘‘Where title
to property is involved. All actions which proceed upon the
theory that the title to property is in plaintiff are incon-
sistent with those which proceed upon the theory that title
is in defendant. But there is no inconsistency between
different remedies, all of which are based upon claim of title
to property in plaintiff, or all of which are based upon the
affirmance of title in defendant.’? Here the action of de-
fendant was not inconsistent, being directed in both causes
toward affirmance of its title and right to possession of the
property. A review of the findings reveals that they fully
support the judgment in every particular.

|| Appellant’s third contention is that an action to
quiet title will not lie against a tenant whose tenancy has
not been terminated previous to the bringing of the action.
Such a doctrine, whether or not appellant has properly stated.
it, can have no application here. The court specifically
found that appellant’s tenancy had terminated and it will
be assumed, on a judgment-roll appeal, that sufficient evi-
dence was adduced to support the findings.

Hl Lastly, appellant contends that neither the pleadings
nor findings show sufficient notice to warrant termination
of his tenancy by cross-complaint. In this behalf appellant
states that although said section 1161a requires a three-day
notice to be served upon both the person holding over and
the subtenant in possession (being said trustor and appel-
lant, his subtenant), there is no showing of service upon
the trustor. But there appears to have been a sufficient com-
pliance with the statutory requirements. The court found
that the three-day notice to quit was served upon appellant.
It is he, and not the trustor, who has steadfastly contested
defendant’s right to the property; hence the failure, if any,
to serve notice upon the trustor may be regarded as having

, | 739

been waived by him. (Calhoma Oil Corp. v. Conniff, 207
Cal. 648, 651 [279 Pac. 771] ; Williams v. Edge, 192 Cal. 254,
255 [219 Pac. 747]; see, also, Hanes v. Coffee, 212 Cal. 777
[300 Pac. 963].)

The judgment is affirmed.

Shenk, J., Langdon, J., Waste, C. J., and Seawell, J., con-
curred.

[L. A. No, 18984, In Bank—May 14, 1984.]

FRANK LA SALLE, Appellant, v. OLE PETERSON et
al., Respondents.

John C. Kleber and Chas. M. Delemeter for Appellant.

Earl Curtis Peck and Abraham Richmond for Re-
spondents.

PRESTON, J.—Appeal by plaintiff from judgment for
defendants entered on order sustaining, without leave to
amend, their demurrer to plaintiff’s amended complaint.

The action is one to set aside a judgment on grounds of
fraud and conspiracy. Although the amended complaint
is voluminous in detail, a brief statement should suffice to

740 a |

show that the ruling of the court below was entirely cor-
rect, as the matters alleged do not pertain to extrinsic or col-
lateral fraud, but purely to intrinsic fraud, which is not
ground for setting aside a judgment.

Plaintiff sets forth the history of a controversy of years
between these parties and alleges that as an outgrowth
thereof defendants, motivated by hatred and revenge, con-
spired to prosecute against him a wholly false and fictitious
action, to wit: Cause No. 300,042 in the Los Angeles County
superior court, wherein the above-named defendant Ole
Peterson was plaintiff and this plaintiff was one of the
defendants and said Peterson had judgment against plain-
tiff for $2,700 and costs. It is further alleged that said
judgment was procured on the false and fraudulent testi-
mony of said Peterson that he was employed by plaintiff
to work in a packing plant and worked there for about two
years without receiving any wages; that, as defendants well
knew, during practically that entire period the packing
plant was closed and said Peterson was employed by an-
other company; that defendants, by their false and fraudu-
lent acts, prevented plaintiff from learning the true facts
to present them to the court and from having a fair trial
but, if granted the opportunity of a new trial, plaintiff
will be able to show conclusively that he is in no way liable
to said Peterson and that said judgment resulted solely from
said conspiracy and perjured testimony. As above stated,
it is unnecessary to set forth the averments of said plead-
ing with greater particularity as it is clear they are but
allegations of intrinsic fraud, affording no basis for the re-
lief here sought.

HM It has long been the rule that a judgment will not
be vacated because it was obtained by false or perjured tes-
timony (Pico v. Cohn, 91 Cal. 129 [25 Pac. 970, 27 Pac. 537,
25 Am. St. Rep. 159, 18 L. R, A. 336], and the fact that the
bringing of the action and the introduction of the perjured
evidence may have resulted from conspiracy does not change
it from intrinsic to extrinsic fraud. (Tracy v. Mui, 151
Cal. 363 [90 Pac. 832, 121 Am. St. Rep. 117].) The plead-
ing before us contains no distinguishing feature sufficient
to remove the cause from operation of this rule. The lan-
guage of the Pico case is directly in point and the doctrine
as there stated has been followed on almost numberless oc-

| 74

easions. (15 Cal. Jur., sec. 124, p. 18 et seq., and cases
cited in notes.)

“That a former judgment or decree may be set aside, and
annulled for some frauds there can be no question; but it
must, be a fraud extrinsic or collateral to the questions ex-
amined and determined in the action. And we think it
is settled beyond controversy that a decree will not be va-
cated merely because it was obtained by forged documents
or perjured testimony. The reason of this rule is, that
there must be an end of litigation; and when parties have
once submitted a matter, or have had the opportunity of
submitting it, for investigation and determination, and when
they have exhausted every means for reviewing such de-
termination in the same proceeding, it must be regarded as
final and conclusive, unless it ean be shown that the juris-
diction of the court has been imposed upon, or that the
prevailing party, by some extrinsic or collateral fraud has
prevented a fair submission of the controversy.’’ (Pico v.
Cohn, supra, p. 183.) After citing some instances of ex-
trinsic or collateral fraud, such as keeping the unsuccessful
party away from court by a false promise of compromise, or
purposely keeping him in ignorance of the suit, the court
continues (p. 184): ‘In all such instances the unsuccessful
party is really prevented, by the fraudulent contrivances
of his adversary, from having a trial; but when he has a
trial, he must be prepared to meet and expose perjury then
and there. He knows that a false claim or defense can
be supported in no other way; that the very object of the
trial is, if possible, to ascertain the truth from the conflict
of the evidence; and that, necessarily, the truth or falsity
of the testimony must be determined in deciding the issue.
The trial is his opportunity for making the truth appear.
If, unfortunately, he fails, being overborne by perjured tes-
timony, and if he likewise fails to show the injustice that
has been done him on motion for a new trial and the judg-
ment is affirmed on appeal, he is without remedy.”

Thus, in this cause, plaintiff had his opportunity for
making the truth appear, upon trial of the cause, when the
conflicting testimony was heard and passed on by the jury,
upon ruling by the judge on motion for new trial and upon
consideration of the cause on appeal. (Peterson v. La
Salle, 123 Cal. App. 639 [11 Pac. (2d) 645].) If he was

nT

overborne by perjured testimony, by his inability to present
the true facts, or to locate and secure the testimony of
defendant Monroe, or by any other acts of the defendants,
he is unfortunately without remedy here. ‘‘The wrong in
such case, is of course a most grievous one, and no doubt
the legislature and the courts will be glad to redress it if
a rule could be devised that would remedy the evil without
producing mischiefs far worse than the evil to be reme-
died. Endless litigation, in which nothing was ever finally
determined, would be worse than occasional miscarriages
of justice...’ (Pico v. Cohn, supra, p. 134.)
The judgment is affirmed.

Shenk, J., Langdon, J., Seawell, J., and Waste, C. J.,
concurred.

{L. A, No. 14333, In Bank—May 14, 1984,]

ANTOINE V. K. pp VALLY, Appellant, v. KENDALL
pe VALLY OPERALOGUE COMPANY, LTD., et al.,
Respondents.

SS «::
——EEE

Don Marlin for Appellant.

Sparling & Teel and Courtney A. Teel for Respondents.

PRESTON, J.—Appeal by plaintiff from judgment en-
tered upon order sustaining, without leave to amend, demur-
rer of defendants to the first and third causes of action
stated in plaintifi’s amended complaint for declaratory re-
lief, for an accounting, for salary, damages and other and
further relief.

The complaint is predicated upon, and pleads im haec
verba, a written agreement executed September 16, 1931, by
plaintiff as first party, and by defendants Henry E. Kendall
and his son, Gerald H. 8. Kendall, as second parties. It
was thereby agreed that these parties would form a Cali-
fornia corporation (later incorporated as Kendall de Vally
Operalogue Company, Ltd. defendant herein), to which
Henry E. Kendall would loan not exceeding $25,000 to
finance a sample operalogue made, from condensation of an
opera by plaintiff, into a sound motion picture. One share
of stock was to be issued to each of the parties, who were to
be the officers of the corporation. Plaintiff agreed to trans-
fer to said corporation all his right and title to all opera-
logues or condensations of operas theretofore or thereafter
made by him, as long as he should be a stockholder of the
corporation. He further covenanted as follows:

‘Party of the first part agrees to enter into a contract
with said corporation for the natural life of said corpora-

tion or until its dissolution by the unanimous consent of all
parties, to give his full time services to the corporation
commencing October 1, 1931, at a Salary of . . . $250 per
week until January 1, 1932, payable weekly, and thereafter
. . . $500 per week, payable weekly.’’

The amended complaint herein, by the first count, alleges
that on September 17, 1931, the corporation was duly organ-
ized; that it accepted plaintiff’s services until January 24,
1933, when he was discharged without just cause and re-
quested to resign immediately as an officer and director
thereof; that plaintiff relies upon the whole of said written
instrument and has at all times held himself in readiness
to render his services to defendants thereunder; that $25,500
became due him from the time of his discharge to the time
of filing this action; that the corporation was entirely domi-
nated by and was the business conduit and alter ego of de-
fendant Henry E. Kendall, used by him as a dummy and
instrumentality for the transaction of business; that Henry
HE. Kendall was and is the real party in interest and that he
secured all the assets and property of the corporation and
mingled them with his own property so that a judgment
against the corporation would be worthless.

The second count of said amended pleading alleges a
eause of action for damages in the sum of $444 by reason
of damage by defendants to certain office furniture and other
property belonging to plaintiff.

The third courit alleges that an actual controversy has
arisen between the parties in relation to their respective
rights and duties under said agreement, pursuant to which
plaintiff condensed, produced and adapted five operalogues
into motion pictures, which defendants delivered to Hduca-
tional Film Exchange, Inc., for distribution; that said agree-
ment required plaintiff to serve the corporation for its
natural life; that defendants breached said agreement in that
the corporation was not dissolved and yet defendants dis-
charged plaintiff and requested his resignation.

A fourth count alleges plaintiff’s right to an accounting
with respect to his share of the money received by defendants
from release and distribution of said five operalogues.

The prayer of the complaint is for an adjudication of
the rights of the parties under said agreement, for an ac-
counting and payment of such moneys as may be found to

be due plaintiff from defendants, for $444 damages, for
$25,500 unpaid salary; plus further amounts becoming due
subsequent to filing of complaint and for other and further
relief.

The court sustained defendants’ demurrer to the first and
third causes of action; judgment followed accordingly and,
as above stated, plaintiff appealed.

Apparently the action of the court below in sustain-
ing the demurrer was based upon two main grounds: (1)
That the contract, particularly as to term and expiration
date of plaintiff’s employment, was too uncertain to be en-
forceable and (2) that the theory of alter ego could not be
applied to the facts pleaded. Appellant, citing established
rules governing the interpretation of contracts, contends
that the agreement is capable of enforcement and that it
should be given effect and construed in favor of validity
rather than invalidity. We fail to see how this could be
done. It is apparent that the agreement was preliminary
and executory and did not bind the later formed corpora-
tion upon the alter ego or any other theory; neither did it
become a contract of employment.

The above-quoted provision, relied upon by plaintiff, was
but a unilateral promise on his part. This is the plain pur-
port of the language used. The agreement provided that
the parties of the second part would advance certain money
and do other specified acts and plaintiff, on his part, agreed
that he would enter into a contract of employment with
the corporation. The second parties largely performed their
covenants, but never accepted the benefit of plaintiff’s prom-
ise to execute a contract of employment with the corpora-
tion. Furthermore, it is also true that the covenant is
indefinite and uncertain as to term of service; in the event
of plaintiff’s refusal to make unanimous the consent to dis-
solution of the corporation his employment would be with-
out termination or specified term. Thus it appears that
the trial court properly sustained the demurrer without
leave to amend.

Although the matter is not mentioned by counsel
for either side, it appears that the court should not have
given a judgment herein until the final disposition of the
entire cause. The law contemplates but one final judgment
in a cause. As stated in the case of Nolan v. Smith, 187 Cal.

1 es

360, 361 [70 Pac. 166], quoting from Stockton etc. Works
v. Glens Fails Ins. Co., 98 Cal. 577 [83 Pac. 633]: ‘‘There
can be but one final judgment in an action, and that is one
which in effect ends the suit in the court in which it was
entered, and finally determines the rights of the parties in
relation to the matter in controversy. (Citing authority.)’”’
See, also, Doudell v. Shoo, 159 Cal. 448 [114 Pac. 579],
Middleton v. Finney, 214 Cal. 523 [6 Pac. (2d) 938], and
Potvin v. Pacific Greyhound Lines, Inc., 180 Cal. App. 510,
512 [20 Pac, (2d) 129].

The judgment being premature, the appeal must be dis-
missed and it is so ordered.

Shenk, J., Langdon, J., Waste, C. J., and Seawell, J.,
concurred,

[I A. No. 13965. In Bank.—May 14, 1934.]

C. P. FRICK et al. Plaintiffs, v. CALMIN MORTGAGE
CORPORATION, LTD. (a Corporation), et al., Re-
spondents; ALU G. SAEWERT, Appellant.

ee
G. M. Cuthbertson for Appellant.

Harmel L. Pratt for Respondents.

PRESTON, J.—Plaintiffs, a judgment creditor and two
stockholders of defendant corporation, filed herein their

Se

complaint, in the nature of a general creditors’ bill, setting
forth a résumé of the financial condition of said corpora-
tion; alleging that while its assets exceeded its known lia-
bilities, said assets were not marketable and the liabilities
were subject to increase; that current liabilities far exceeded.
current assets and the corporation was insolvent; that it
was being pressed by creditors who threatened attachment
suits and that attempts by plaintiff Frick to enforce collec-
tion of his judgment by execution would precipitate general
action on the part of other creditors and lead to wasteful
strife and controversy, all of which could be avoided and the
properties and assets of the corporation preserved for
equitable distribution among those entitled thereto by inter-
vention of the court in the appointment of a receiver of
said assets and properties, wherefore plaintiffs prayed that
the court take cognizance of the matters so stated and of
disputed rights and obligations of the parties, and that, in
order to preserve intact and protect from waste the assets
and properties of defendant corporation, a receiver be ap-
pointed to take charge of, collect and hold all of said assets
and properties, subject to the order of the court, and to
exercise such other powers and authorities as might from
time to time be deemed necessary.

On the same day in which the. complaint was filed, de-
fendant corporation, through its president and secretary,
entered a voluntary appearance in the cause and filed a
written consent to appointment of a receiver as prayed.
Thereafter, and on August 10, 1931, the court made its
order appointing such receiver and he duly complied with
the couditions of the order by filing a good and sufficient
bond, and entered upon the performance of his duties.
About a year later, on September 12, 1932, the court, of its
own motion, vacated and annulled the order of August 10th,
and ordered a petition to appoint another receiver off calen-
dar. From this order plaintiff Saewert appealed. On
October 19, 1932, a supplemental nunc pro tunc order was
filed, amending the minute order of September 12th to show
that it was based upon the court’s finding that the first order
of appointment was in excess of its jurisdiction.

Appellant, of course, contends that the court had
jurisdiction to appoint a receiver and that it erred in vacat-
ing said order of appointment on its own motion, without

748 I

notice, and after more than a year had elapsed. With this
we cannot agree. The complaint failed to state a cause of
action in that it asked for no affirmative relief to which a
receivership might be incidental; hence the order appointing
the receiver had no validity. Furthermore, the fact that
the corporation consented to the appointment is immaterial.

As authority for this‘ pronouncement see the recent case
of McCutcheon v. Superior Court, 184 Cal. App. 5 [24 Pac.
(2d) 911], decided August 22, 1933, and cases therein
cited. No additional’ citation of authority need be made to
effectually dispose of this appeal. That case is similar in
fact to the instant case, it is directly in point and contains
a full discussion of the issues raised by appellant.

The order is affirmed.

Shenk, J., Langdon, J., Seawell, J., and Waste, ©. J.,
concurred.

[Sac. No. 4819, In Bank—May 15, 1984,]

PARADISE IRRIGATION DISTRICT, Respondent, v.
ROBERT BARRY, Appellant.

749

Willis 8. Mitchell and Franklin J. Cole for Appellant.

J. Oscar Goldstein for Respondent.

WASTE, C. J.—Plaintiff brought this action to quiet its
title to certain real property situate in the county of Butte.
The defendant, by way of answer and cross-complaint, set
up an interest in the property under a two-year lease by the
terms and provisions of which he was given the right to
imine for and extract minerals from the property. He
prayed that plaintiff take nothing by its action and that
the terms and provisions of the lease be specifically enforced.
At the conclusion of the trial, the court below found, in sub-
stance, that plaintiff had performed its part of the agree-
ment, that defendant had failed to perform any and all of
the things required of him under the lease, and that plain-
tiff, because of such breach, had theretofore notified defend-
ant in writing of its election to terminate the lease, as
therein provided. Though the evidonce is conflicting in

750 — a

many respects, there is substantial evidence supporting each
of these findings. Judgment was accordingly entered quiet-
ing plaintift’s title and decreeing that defendant take noth-
ing under his cross-complaint. This appeal followed.

Defendant’s first point is that a plaintiff in a quiet
title action must prevail upon the strength of his own title
and not upon the weakness of his adversary’s title. With
this elementary principle we have no quarrel. In an at-
tempt to show its pertinency to the present case, the de-
fendant contends that plaintiff’s own witnesses testified that
shortly after the execution of the lease some doubt arose as
to whether plaintiff had title to the mineral rights on certain
of the lands leased to the defendant. In view of this alleged
deficiency in its title, it is contended that plaintiff cannot
prevail. The record does not bear out the defendant’s con-
tention. It is true there is evidence to the effect that plain-
tiff, shortly after the execution of the lease, discovered that
some doubt existed as to its title to the mineral rights per-
tinent to a portion of the demised lands. However, there
is also evidence to the effect that the parties, in order to
overcome this deficiency, executed a written addendum to the
lease which, among other things, declared that ‘“‘It is fur-
ther understood and agreed by and between both parties to
this lease that the lessor is granting by this lease the right
to mine only on mineral claims or land to which the lessor
now has, or may later acquire a title.’’

The foregoing paragraph of the addendum, duly executed
by the parties thirteen days after the execution of the lease,
served to modify the same and limit the rights demised to
mineral rights then owned or subsequently acquired by the
lessor. In view of this, the asserted deficiency in plaintiff’s
title is without support.

| | Defendant next urges that a lease can only be ter-
minated as provided by statute and that the giving of the
notices provided for in section 789 of the Civil Code and
in section 1161 of the Code of Civil Procedure, is an essen-
tial prerequisite to such termination and right of re-entry.
Hanes v. Coffee, 212 Cal. 777 [800 Pac. 963], was an action
to quiet title, the parties being lessor and lessee, respectively.
It is there declared: ‘‘Of the several contentions raised on
this appeal, the first is that the proceeding to quiet title was
improper for lack of notice of termination of the lease as

es Tt

required by statute. It has, however, been held that in this
state the landlord’s remedies of ejectment, unlawful detainer
and quiet title are distinct; and that the statutory notice
provided for in section 1161 of the Code of Civil Procedure
is unnecessary in an action to quiet title.”’

The case of Andrews v. Russell, 85 Cal. App. 149 [259
Pace. 118], presented an action to quiet title to certain lands
which had been the subject of an oil lease to the defendant’s
assignor, it being alleged that the drilling operations had
not been performed as provided in the lease. It is there
stated: ‘‘Our attention is also called by appellant to sections
789 and 790 of the Civil Code and section 1162 of the Code
of Civil Procedure. Section 789 of the Civil Code provides
for the termination of a tenancy or eétate at will; section
790 of the same code, for the method of recovery, and section
1162 of the Code of Civil Procedure prescribes how the no-
tice shall be served. These sections are not applicable as
the leasehold here was not a tenancy or estate at will. It
was a lease for a definite term of three years with certain
provisions that it would terminate if the covenants were not
fulfilled. Appellant cites us to several cases as holding that
unlawful detainer is the statutory method of restoring pos-
session from a tenant. The decisions cited, however, do not
hold that unlawful detainer is the exclusive action by a
landlord against a tenant... . It would seem that a lessee
who has forfeited his rights under his lease by reason of
his failure to comply with the covenants of the lease is analo-
gous to a vendee under a contract of purchase who has de-
faulted in the payment of his instalments, and it has been
held that an action to quiet title will lie in such case...
and in Lewis v. Agoure, 8 Cal. App. 146 [96 Pac. 327], in
which case a transfer to the Supreme Court was denied, it
is held that an action to quiet title is the proper action
against a lessee in whom no right remained, and here the
court found that all rights of appellant in the lease had
terminated prior to the commencement of the action, As
to appellant’s second point that plaintiff cannot escape the
obligation to give notice of default and demand for posses-
sion there is no merit. Plaintiff does not rely upon the stat-
ute permitting an action for unlawful detainer with its
accompanying penalties, but upon an action to quiet
title...”

752 — Ye

These decisions sufficiently and satisfactorily dispose of

the second contention. .

Defendant finally contends that the terms and pro-
visions of the lease should be specifically enforced. The
finding of the trial court, which is amply supported by the
evidence, that the defendant had failed to comply with the
terms and provisions of the lease and had‘therefore forfeited
all rights thereunder, precludes the granting of such relief.
(See. 3392, Civ. Code.) Hi Nor do we find any merit
in the point that defendant was prevented from performing
his part of the agreement by reason of plaintiff’s failure to
perform certain conditions precedent. In this connection
defendant refers us to the following provision of the lease:
“This lease is executed subject to the approval of the State
Engineer and the Bond Certification Commission of the
State of California and no actual mining operations are to
be commenced under the terms of this lease until such ap-
proval shall be first had and obtained.’’

While this provision of the lease requires that such ap-
proval be obtained before operations are commenced, it
is singularly silent as to which party is charged with
the duty of obtaining the approval. Certainly the provision
easts no greater burden on plaintiff than on the defendant.
Inasmuch as the defendant was to carry on the mining opera-
tions under the lease it might reasonably be contended that
he should seek and procure such approval before proceeding.

However, there is an additional answer to this particular
contention of the defendant. Plaintiff did obtain from the
state engineer, who was a member of the bond certification
commission. designated in the provision, a written statement
that the approval mentioned in the above-quoted provision
‘was not required. In response to plaintift’s inquiry the state
engineer wrote: ‘‘Referring to lease by district of mining
rights on the Magalia reservoir site: An agreement for such
a lease apparently does not require the approval of the
Bond Commission, but is a matter entirely within the dis-
eretion of the board of directors. However, since the sub-
ject was first brought to our attention in April, 1929, legisla-
tion governing the supervision of dams has been enacted,
placing such supervision under the State Engineer, to whom
the matter should be referred if there appears to be any

a 168

possibility of the proposed mining operations endangering
the safety of Magalia dam or reservoir.’’

What has been said sufficiently disposes of the appeal and
of the motion to affirm filed by the plaintiff.

The judgment is affirmed.

Preston, J., Langdon, J., Shenk, J., and Seawell, J., con-
curred,

[L. A. No, 14497, In Bank—May 15, 1984]

SARAH R. LORRAINE et al., Petitioners, v. MARSHALL
F. McCOMB, as Judge of the Superior Court, ete. et
al., Respondents.

Lawrence Cobb and Henry G. Bodkin for Petitioners.

Byverett W. Mattoon, County Counsel, 8. V. 0. Prichard,
Deputy County Counsel, and A. G. Ritter for Respondents.

PRESTON, J.—By this application for writ of mandate
petitioners seek to ascertain the validity of the recent amend-
ment to section-595 of the Code of Civil Procedure (Stats.
1938, p. 1873), which, so far as here material, provides:
“In all cases, the court shall postpone a trial, or the hear-
ing of any motion or demurrer, for a period not to exceed
thirty days, when all attorneys of record of parties who have
appeared in the action agree in writing to such postpone-
ment.’?

a | 155

A certain action entitled Sarah R. Lorraine, Plaintiff’, v.
I. B. Doyle, Defendant, No. 347-524, begun January 18,
1933, was at issue in the Superior Court of the County of
Los Angeles, prior to August 24, 1933, on which date the
cause was regularly set for trial for October 5, 1933. Later
the trial was postponed to October 9, 1933. On the last-
mentioned date, instead of going to trial, the plaintiff and
defendant, through their respective counsel, agreed in writ-
ing to postpone the trial date to October 24, 1933, or other
subsequent date within the thirty-day period from October
9th. However, his Honor, Marshall F."McComb, the judge
in charge of the trial calendar,- refused to allow this re-
quested postponement, and as counsel did not proceed with
the trial, the cause was ordered to the list of off calendar
eases, to be again restored in the original manner required
by the rules of practice of the court. The parties, acting
jointly, by this proceeding seek to compel the reinstatement
of the cause to its previous status on the calendar,

The essence of the grievance of petitioners is that
under said practice a trial court, by insisting upon trial on
a day certain, over protest of both litigants, acts so arbi-
trarily as to violate the legal rights of the parties. How-
ever, it requires no effort to see that there are two sides
to this controversy. The orderly and effective dispatch
of legal business is the controlling factor with the court.
The rights and conveniences of the parties to each particular
cause present the other side. It is regrettable that a clash
may at times occur between these forces. But the exercise
of controlling discretion in such a situation must be exerted
by the trial court, subject to revision by the higher courts
if such discretion is abused. Ordinarily it should be pos
sible to accommodate the parties in cases where they mutu-
ally agree to a postponement of the trial date, but in case
this becomes impracticable, the judicial control reposed in
the court by the Constitution must prevail.

Petitioners rest their contention upon the provisions
of section la, article VI, subsection 5, of the Constitution,
which provides that the Judicial Council may make rules of
practice and procedure for the courts when ‘‘not inconsistent
with laws that are now or that may hereafter be in force’.
Respondents reply, asserting that a court has the power
expressly conferred by section 7, article VI, of the Constitu-

°

156 | 7

tion, which reads: ‘‘The judges of each superior court in
which there are more than two judges sitting, shall choose,
from their own number, a presiding judge, who may be re-
moved as such at their pleasure. Subject to the regulations
of the judicial council, he shall distribute the business of the
court among the judges, and prescribe the order of business,’’

There is no lack of harmony between these provisions of
the Constitution; first, becaiise a prescribing of the order of
business on a calendar is the exercise of judicial discretion
and is not necessarily promulgating a rule of practice or
procedure; secondly, the laws which inhibit contrary rules of
practice or procedure must- be valid enactments.

The triune powers of the state, as shown by the
three departments, are thoroughly independent in certain of
their essential functions, and at the same time mutually de-
pendent in others (Brydonjack v. State Bar, 208 Cal. 439
[281 Pac. 1018, 66 A. L. R. 1507], and cases there cited).
This truth often gives rise to occasions where the line of
separation is not clear and distinct. Accordingly, ‘repeated
instances are to be found where the judicial department has
submitted to the regulatory power of the legislative depart-
ment. This is particularly true in matters of procedure.
But there must come a point beyond which the judicial de-
partment must be allowed to operate unhampered by legis-
lative restriction. However, we are not called upon to ex-
pressly declare the statute in question unconstitutional, as:
we well might do upon the authority cited by respondents
(Atchison, T. & 8. F. Ry. v. Long, 122 Okl. 86 [251 Pac.
486]; Schario v. State, 105 Ohio St. 585 [188 N. E. 63];
Ringlander v. Star Co., 98 App. Div. 101 [90 N. Y. Supp.
772) ; affirmed 181 N. Y. 581 [738 N. B. 1131]). In the latter
case it is said (p. 104):

“‘One of the powers which has always been recog-
nized as inherent in courts, which are protected in their ex-
istence, their powers and jurisdiction by constitutional pro-
visions, has been the right to control its order of business
and to so conduct the same that the rights of all suitors
before them may be safeguarded. This power has been
recognized as judicial in its nature, and as being a necessary
appendage to a court organized to enforce rights and re-
dress wrongs.’”

, De 1ST

HE We cannot ascribe to the legislature the intent to
make the action of the parties compulsory upon the court in
each instance. Its provisions must be held directory and on ©
a par with such statutes as section 632 of the Code of Civil
Procedure, which requires the court, on trial of a question
of fact, to make and file its written decision within thirty
days after submission of the cause to it; or section 634 of the
Code of Civil Procedure which purports to require the trial
judge to delay signing findings for five days after service
of proposed findings; or section 664 of the Code of Civil
Procedure, which provides that the judgment upon a verdict
must be entered within twenty-four hours after rendition
of the verdict.

In further illustration of the trend of the courts respect-
ing statutes of this class could be cited a long list, were it
thought profitable, such as section 57 of the Code of Civil
Procedure, providing for preference on the calendars of
appellate courts, of appeals in probate proceedings and con-
tested election cases, or section 1264 of the Code of Civil
Procedure, providing for preference on the calendar for trial
of eminent domain cases,

The alternative writ is discharged and the petition is dis-
missed.

Langdon, J., Shenk, J., Seawell, J., and Waste, C. J., con-
curred,

[L. A. No, 14129, In Bank—May 15, 1934]

R. S. HOUSSELS et al, Appellants, v' SID GLASGOW
et al, Respondents.

758 a 7
|
©. Douglass Smith for Appellants.

George W. Nilsson and Monta W. Shirley for Respondents.

SHENK, J.—This is an appeal by the plaintiffs from a
judgment in favor of the defendants Edwin and Harriett
Jones.

The action was brought to quict the title of the plaintiffs
in and to the right to a one per cent of the production
under an oil lease executed by the owners of lots 12 and 13
in block A of Mountain Meadows tract in the county of Los
Angeles. The plaintiffs sued in their representative capacity
as trustees of Atlantic’ Petroleum Syndicate, an unincorpo-
rated association.

On July 29, 1922, subject to a twenty per cent owners’
royalty reserved, the owners executed an oil and gas lease
covering said lots to Taylor, Hjorth and Looney, who in turn
assigned the lease to Gordon, who assigned to C. S. Summar,
who assigned to Joseph Maltby as trustee, who, according to
the record, agreed to hold twenty per cent of the produc-
tion from both lots as an overriding royalty in favor of
C. S. Summar, N. H. Stearn and others. The issue ten-
dered and tried in this action was the claim of Edwin and
Harriett Jones to a one per cent of the production as a por-
tion of the twenty per cent overriding royalty. The court
found in accordanée with their claim. The evidence showed
that as part of the consideration for the assignment from
C. S. Summar to Maltby, trustee, the latter agreed to issue
overriding royalties to the extent of twenty per cent to
Summar and others. Acting as attorney-in-fact for Summar,
Maltby transferred a one per cent interest to G. C. Summar,
a brother of C. S. Summar. This one per cent was sub-
jected to many assignments and was finally purchased by the
defendants Jones. Thereafter Maltby, as trustor, executed
a declaration of trust for the Atlantic Petroleum Syndicate
in which he declared that he held and controlled the right

a PC 759

to sixty per cent of the production. The remaining per-
centages were made up of the twenty per cent owners’ roy-
alty and the twenty per cent overriding royalty. J The
court found on sufficient evidence that the interest of the
defendants Jones was a part of the overriding royalties and
not a part of the sixty per cent, and concluded that the
plaintiffs, as suecessor-trustees of Maltby, were bound to
such interest. The findings and conclusions of the court
are supported by the record. The subsequent declaration of
trust was made subject to the interest of the owners of
the overriding royalties and the beneficiaries of said trust
were also bound thereby.
The judgment is affirmed.

Preston, J., Langdon, J., Waste, C. J., and Seawell, J.,
concurred. ”

[S. F, No, 15157, In Bank.—May 16, 1934]

A. G. BEARDEN, Petitioner, v. C. J. COLLINS, Registrar
of Voters, ete., Respondent.

760

Sullivan, Roche, Johnson & Barry and W. T. Sweigert
for Petitioner.

John J. O'Toole, City Attorney, for Respondent.
Paul C. Dana, as Amicus Curiae on Behalf of Respondent.

PRESTON, J.—Petitioner seeks a peremptory writ of
mandate commanding respondent, as Registrar of Voters of
the City and County of San Francisco, State of California,
to omit from the proceedings leading up to the primary
election to be held August 28, 1984, all referencé to the
office of judge of the Superior Court of the State of Cali-
fornia in and for the City and County of San Francisco,
designated as office No. 3. In response to an order to show
cause, respondent has filed a demurrer to the petition.

It appears that in 1928 Judge George H. Cabaniss was
duly elected to the superior court of said city and county
for a full term of six years, ending on the first Monday
after the first day of January, 1935. He duly qualified and
thereafter acted as such judge until April 19, 1934, on
which date he died. His death, therefore, occurred during
the year in which an election would have been regularly held
to elect his successor for the ensuing full term of six years.
Petitioner contends that the effect of the death of Judge
Cabaniss on said date will be to delay the election of his
successor to the general election of 1936 and that no election
to fill said office can be held during the year 1934.

— 76.

In support of this position she relies on section 8 of
article VI of the state Constitution, which provides: ‘‘The
term of office of judges of the superior courts shall be six
years from and after the first Monday of January after the
first day of January next succeeding their election. A
vacancy in such office shall be filled at the next succeeding
general state election after the first day of April next suc-
ceeding the accrual of such vacancy by the election of a
judge for a full term to commence on the first Monday of
January after the first day of January next succeeding his
election. The governor shall appoint a person to hold such
vacant office until the commencement of such term.’’

Petitioner argues that the second sentence of said pro-
vision is so clear and unambiguous that there is no room for
judicial interpretation or construction thereof. If we accept
this contention it follows that no election can be held in 1934
to fill said office and this is so even though the Governor
might choose not to appoint any person to fill said vacancy
and thus the office would remain vacant until the first
Monday after the first day of January in 1937. This
necessarily must be the argument of petitioner, otherwise
she has no standing in court as the vacancy has not as
yet been actually filled.

Again, following the same reasoning, had Judge Cabaniss
lived until after election day of this year, and yet not
stood for re-election, or had he run, been defeated and there-
after, and before the first Monday after the first day of
January, 1935, had resigned or died, the judge-elect could
not qualify as such officer for the ensuing term and his
election would be void.

‘We cannot agree that such results were contem-
plated by the people in adopting said constitutional pro-
vision. Said clause, within itself, gives convincing evidence
that the intent was to provide for the filling of vacancies
for the remainder of the existing term in which they might
occur and that the deferred ‘election for this purpose must
be held before the expiration of such term; that when such
election is held it is not to fill the vacancy for the unex-
pired portion of the existing term but is an election for
the full ensuing term. Clearly, the provision does not con-
template a deferred election in a year when the general law
provides for a regular election to fill the new term to begin

762 Le |

the following year. Therefore, when a term is expiring at
the close of the year of a general election, the occurring
of a vacaney at any time in such year is a false quantity,
except that, under the last sentence of said provision, the
vacaney can be filled by the Governor until the commence-
ment of the new term. Moreover, in order to harmonize the
first sentence of said provision and other related provisions
of the Constitution with the sentence under construction, it
is necessary to give it the above meaning.

Again, to give the provision the construction contended
for by petitioner would be to arbitrarily add two years to
the term of the office held by Judge Cabaniss, which ex-
pires at the end of the present year, and to follow such
addition by conducting an election to fill a vacancy almost
two years after expiration of the term in which it occurred.

Under article VI, section 6, of the Constitution, it
was clearly the intent of the framers that the people should
reserve to themselves the right to clect such judges and
their successors at regular intervals and that any other
mode of filling said offices should be by use of an emergency
method to fill vacancies until a general election should be
held.

| | We therefore construe said constitutional pro-
vision above quoted to mean that the election of a successor
to Judge Cabaniss shall proceed in the same manner as
though no vacancy in the office has occurred and that the
successor elected by the people at the coming election shall
hold said office for the full term of six years, commencing
on the first Monday after the first of January, 1935, and
that any appointee named by the Governor hereafter shall
hold office only for the remainder of the present unexpired
term, which ends on said first Monday after the first day
of January, 1935.

The petition for writ of mandate is denied.

Langdon, J., Spence, J., pro tem., and Knight, J., pro
tem., concurred,

SHENK, J., Dissenting.—I dissent.

There can be no escape from the conclusion that section
8 of article VI of the Constitution in plain and unam-
piguous language provides that a vacaney in the office of

— 763

superior judge shall be filled by election at the general
election occurring after the first day of April next succeed-
ing the accrual of the vacancy, and that at such election
the person elected shall hold for a full term of six years;
also that the Governor shall appoint a person to fill such
vacant office until the commencement of that full term.
When the Constitution, as to the facts presented, speaks
‘plainly and with no uncertainty, the court should obey.
Every canon of jurisprudence is to that effect. In such
ease there is no opportunity for construction. It is, of
course, a cardinal rule that the intention of the lawmakers
should be followed, but this rule is subject to the imperative
and paramount rule that the court cannot depart from the
meaning of language which is free from ambiguity. In
such case the office of the judge is to declare what is con-
tained therein, ‘‘not to insert what has been omitted or to
omit what has been inserted’. (Sec. 1858, Code Civ. Proc. ;
Seaboard Acceptance Corp. v. Shay, 214 Cal. 361, 366 [5
Pac. (2d) 882].) The Constitution itself declares that its
provisions are mandatory and prohibitory. (Sec. 22, art.
1.) If the language used shows plainly and unequivocally a
definite purpose, it is the duty of the courts to carry that
purpose into effect. When no two meanings can be placed
on the language used, it is mandatory, the courts are not
at liberty to look elsewhere, and are bound to obey it.
(Boca Mill Co. v. Curry, 154 Cal. 326 [97 Pac. 1117]; 5 Cal.
Jur., p. 598, and cases cited.) If the meaning of the pro-
vision in question were doubtful, one need go no further
than the argument sent to every voter in the state in 1926
to ascertain its meaning as understood by the voters. The
argument was as follows: ‘‘If a vacaney occurred after
April first of an election year, the time is too short to circu-
late petitions and satisfactorily prepare for an election at
the August primary, and in such case the governor will
make an appointment to fill the vacancy until the next
election year.’’? This argument may be resorted to for aid
(which is not necessary here), in ascertaining the meaning
of the amendment. (Beneficial Loan Society v. Haight,
215 Cal. 506 [11 Pac. (2d) 857]; Cypress Lawn C. Assn. v.
San Francisco, 211 Cal. 387 [295 Pac. 818] ; Yosemite L. Co.
v. Industrial Acc, Com., 187 Cal. 774 [204 Pac. 226, 20
A. L. R. 994]; Story v. Richardson, 186 Cal. 162 [198 Pae.

164 De |

1057, 18 A. L. R. 750].) There should be no hesitancy on
the part of the court to apply the constitutional provision
in its plain and unambiguous sense, especially as applied
to the facts presented. If under a different state of the
facts its literal enforcement would lead to an absurdity or
tend to thwart the preferential right to elect, that situation
may adequately be dealt with when it arrives. It might
well be argued that if a vacancy occurred at a time
when the machinery of election, under the Constitution and
statutes providing for elections, had already occupied the
field and the electorate were then in process of election for
the forthcoming full term, or the full term about to com-
mence had already been filled by an election, in such event
the election might proceed, or the position be deemed filled
by the election; but we have no such case before us. On
the contrary, we are confronted with a state of facts which
renders the plain meaning of the Constitution directly ap-
plicable with no results leading to absurdity or even incon-
venience.

It is highly significant that in 1928 sections 8 and 4a
of article VI of the Constitution, with reference to vacancies
in the Supreme Court and District Courts of Appeal, were
amended to provide by explicit language for the contingency
which the majority are now reading into and adding to
section 8 by a process of construction. Moreover, the Con-
stitution of 1879 (sec. 6, art. VI) provided: ‘‘If a vacancy
occur in the office of a judge of the superior court, the
governor shall appoint a person to hold the office until the
election and qualification of a judge to fill the vacancy,
which election shall take place at the next succeeding general
election, and the judge so elected shall hold office for the
remainder of the unexpired term.’? What the majority
have done has been to re-establish the rule of 1879, not-
withstanding the last expression of the people in the amend-
ment of 1926. In my judgment the plain and unmis-
takable mandate of the amendment, as to the facts now
presented, should be given full effect by the issuance of the
writ.

Waste, C. J., and Sturtevant, J., pro tem., concurred.

765

| [. A. No, 14081, In Bank—May 17, 1934.]

CARRIE L. HUMPHREY, Respondent, v. HARRY H.
CULVER & COMPANY (a Corporation) et al., Appel-
Jants.

Ben 8. Hunter for Appellants.
Edward H. Gaylord for Respondent.

SHENK, J—This is an appeal from a judgment for the
plaintiff in an action to rescind and cancel a contract entered
into between the parties in October, 1929, for the purchase
by the plaintiff of a certain lot in the city of Los Angeles
for the sum of $5,700. The claim for cancellation was based
on alleged fraudulent representations of the defendant.
A copy of the contract is annexed to the complaint as an

1 es

exhibit. The complaint also alleged that at the time the
plaintiff signed the agreement the defendant Rose, acting
for and in behalf of the other defendants, would not allow
the plaintiff to read the agreement, but falsely and fraudu-
lently represented to her that each and all of the clauses
of the agreement were favorable to the plaintiff. The plain-
tiff also sought judgment for payments made under the con-
tract amounting to $1425.

A demurrer to the complaint was overruled, and a trial
was had on the issues joined by the answer of the corporate
defendants. The court found certain false and fraudulent
representations to have been made to the plaintiff by the
agent of the answering defendants, by reason whereof the
plaintiff was entitled to the relief sought. The court also
found that at the time the plaintiff signed the agreement
the defendant Rose, acting on behalf of the other defend-
ants, would not allow the plaintiff to read the agreement,
but falsely and fraudulently represented to the plaintiff
that each and all of the clauses of the agreement were favor-
able to her. -

The defendants rely on certain language in Gridley
v. Tilson, 202 Cal. 748 [262 Pac. 322], to support their con-
tention that the court erred in overruling the demurrer to
the complaint made on the ground that no cause of action
was stated, and in support of their argument contend that
on the facts disclosed the defendants as principals cannot
be bound except by the representations contained within the
written agreement. This is the only ground relied upon for
a reversal. The agreement provided that the principals
would not be bound except by the written representations
and provisions contained therein and that the agent had no
authority to make any other or different representations.
However, as noted, the complaint alleged and the court
found in effect that the plaintiff was prevented from read-
ing, or was induced by the agent not to read, the contract.
No contention is made that the evidence is insufficient to
support the finding on this phase of the plaintiff’s case, nor
is any contention made that the evidence does not support
the findings as to other fraudulent representations made by
the agent’ Rose. [J In such circumstances the case of
Gridley v. Tilson, supra, does not apply. Further, it was
therein expressly recognized that the rule contended for is

inapplicable when the purchaser’s failure to read the con-
tract is due to the fraud or trickery of the seller or his
agent. (Simmons v. Ratterree Land Co., 217 Cal. 201 [17
Pae. (2d) 727].)

The judgment is affirmed.

Preston, J., Langdon, J., Waste, C. J., and Seawell, J.,
concurred.

[L. A, No, 14641. In Bank,—May 17, 1934]

MINNIE DAUGHERTY et al., Petitioners, v. INDUS-
TRIAL ACCIDENT COMMISSION, J. B. QUINN,
Trustee, ete., et al., Respondents.

Doyle, Clark, Thomas & Johnson and V. Betty Doheny
for Petitioners.

Everett A. Corten and F. Britton McConnell for Respond-
ents.

SHENK, J.—This is a proceeding to review an order of
the respondent commission denying disability indemnity and

1S

a death benefit to the petitioners as surviving widow and
daughter of Charles H. Daugherty, deceased.

Daugherty was employed as a helper at an oil-well plant
in Long Beach. On August 24, 1931, in the course of his
employment, he was descending a stairway when within a
step or two from the bottom he was seen by a workman on
an adjoining property, Hawley by name, to stumble and
fall backward. He did not arise quickly so Hawley went
to him. When he got to his side Daugherty was standing.
Hawley took him by the arm, helped him to walk a short
distance, when he sat down on a bench. Daugherty seemed
dazed but said he thought he was all right, whereupon Haw-
ley departed to resume his own work and did not see the
deceased again. No wound or other traumatic conditions
were observed by Hawley except that one of Daugherty’s
fingers was bleeding. Apparently Daugherty was a night
workman, for the accident occurred at 7 o’clock in the morn-
ing, and his wife testified that he came home about 7 that
morning and that this was his usual time of arrival.

On arriving at his home he went to bed as usual but got
up in about an hour complaining of a terrible headache.
About noon of that day he had a convulsion. These spells
recurred until, on September 6, 1931, he was, on the affidavit
of his wife, taken to the psychopathic ward of the general
hospital, where his trouble was diagnosed as probable cere-
bral thrombosis. He remained in the hospital for about ten
days after which he went home, returning to the hospital
every few days for treatment. He was discharged from
the hospital on September -25th, and on October 15th went
with his wife to his former home in Texas. In Texas he
was unable to walk without assistance, the convulsions re-
curred, he gradually became worse and died in Texas on
January 22, 1932. The certificate of the attending physician
noted ‘‘epilepsia caused by clog on brain’’ as the cause of
death.

Upon a full and extensive record of the evidence, both lay
and professional, the commission found that it did not estab-
lish either that Daugherty’s disability or his death was
caused, aggravated or accelerated by any injury sustained
by him, or by reason of his employment. The controversy
hinges on whether there is substantial evidence to support
the findings.

es

The deceased was a man about 48 years of age and prior
to August 24, 1931, had been in apparent good health. He
was not a robust man, but was considered by relatives as
an ‘‘average healthy man’’. The history of his case taken
at the general hospital showed that the wife had stated to
a member of the hospital staff that the deceased had had a
convulsion while at work. On August 2Ist, three days be-
fore he fell while at work, he had suffered visionary dis-
turbanees of the left eye. On September 22d his eyes were
examined by an ophthalmologist, who reported ‘‘visual ac-
tivity 20/50 with glasses and evidence of choked disc in
the left eye’’. The evidence of the specialist, based upon
a history of the case, showed that progressive visual dis-
turbances with choked dise was ‘‘a sign universally accepted
as evidence of increased intra-cranial pressure”’; that the
symptoms and signs presented by Daugherty between Au-
gust 24, 1931, and January 22, 1932, were not due to the
fall which took place on August 24, 1931, and that the fall
was the result of a ‘petit mal’’ type of seizure which was
the initial symptom of pre-existing lesion in the cerebrum.
One of the doctors expressed the opinion that Daugherty’s
case was one of the intra-cranial hemorrhages due to his
fall. There was no evidence of concussion of the brain,
and other doctors stated that in order to bring about con-
cussion of the brain and the consequent intra-cranial hem-
orrhage it was necessary that the patient sustain adequate
trauma and that the symptoms of Daugherty from the out-
set were incompatible with the assumption of intra-cranial
hemorrhage; that the fall sustained by Daugherty was due
to a seizure of epileptiform character, and that the steady
progression of intra-cranial tension extending over a period
of five months was the cause of death. It is true that
Doctor George W. Jones, assistant medical director of the
commission, questioned whether Daugherty really fell, not-
withstanding the uncontradicted testimony of Hawley that
he saw him fall. It is therefore contended by the petitioners
that the testimony of Doctor Jones was based upon a false
premise, viz., the absence of a fall, and that the conclusion
expressed by him is without evidentiary value. The opin-
ions of Doctors John C. Ruddock and John B. Doyle were,
however, based on the assumption of a fall on August 24,
1931, and on all of the other evidence in the proceeding.

a

770 ee —

Their review of the case, which is full and complete, was
sufficient in itself to support the finding of the commission.
There were conflicting opinions of the physicians and
specialists as to the cause of the convulsions, and the con-
troversy developed into a lively contest. The commission
within its powers, as trier of the facts, could have adopted
either view. [J The responsibility lay with the commission
to make a determination on this conflicting evidence and on
the record presented it cannot be said, as a matter of law,
that the finding is without substantial support in the evi-
dence. In such case the order must be affirmed. (North
Pac. 8. 8S. Co. v. Industrial Acc. Com., 174 Cal. 500 [168
Pae. 910]; Jenks v. Carey et al., 136 Cal. App. 80 [28 Pac.
(2d) 91].)
The order is affirmed.

Waste, C. J., Langdon, J., and Preston, J., concurred.

Rehearing denied.

[S. F. No. 14736, In Bank.—May 17, 1984.]

E. H. ANDERSON et al, Appellants, v. VICTORY A.
DERRICK et al., Respondents.

is]
is

172 ee 7

B. W. Sawyer and L. Seidenberg for Appellants.

Fitzgerald, Abbott & Beardsley, John L. McVey and
W. E. Rode for Respondents.

WASTE, C. J.—Plaintiffs instituted this action to recover
damages alleged to have been suffered by them as the result
of the fraudulent acts of the defendants who, as directors of
the defendant Automatic Electrical Machine Company, a
foreign corporation doing business in this state, are asserted
to have conspired to cause, and actually did cause, the
transfer of the entire corporate assets to one of their num-
ber, thereby depriving the corporation and its stockholders,
among whom are plaintiffs, of everything of value. The
complaint concludes with a prayer that plaintiffs be given
judgment in the sum of $45,000, representing the par value
of plaintiffs’ stock alleged to have been made valueless by
the wrongful acts of the defendants.

Plaintiffs duly demanded a jury trial, contending that
the action is one at law prosecuted in their individual
eapacities to directly recover such damages only as were
suffered by them, as distinguished from the whole damage
inflicted on the corporation or the stockholders as a group.
The trial court concluded, in conformity with the econten-
tion of the defendants, that the primary wrong was done
to the corporation and that the plaintiffs’ damage, in com-
mon with that done to other stockholders, was secondary
in character and resulted solely and alone from their stock
ownership. This being so, the court held that the action
was representative or derivative in character and cogniz-
able only in equity, and that plaintiffs were not therefore
entitled to a jury as a matter of right. In the absence of a
jury the plaintiffs declined to introduce any evidence,
whereupon the court made findings in favor of the defend-
ants and entered judgment accordingly. This appeal fol-
lowed. .

Throughont their briefs the plaintiffs repeately urge that
they are prosecuting this action in their individual capa-
cities and not as representatives of the corporation or of the
remaining stockholders. They request that we treat as sur-
plusage and ignore anything in the amended complaint

So 7183

that savors of a representative suit. They insist that a
stockholder, injured in common with all other stockholders
by the wrongful acts of the corporate directors, may bring
an individual action, as distinguished from a representative
or derivative action, to recover any damage suffered by him
as the result of such wrongful acts. In their opening bricf
they concede that a conclusion that the action is derivative
in character will be fatal to their cause and appeal.

Tn the absence of statute, it is the generally accepted
rule that misfeasance or negligence on the part of the
managing officers of a corporation, resulting in loss of its
assets, as alleged herein, is an injury to the corporation for
which it must sue. A stockholder cannot sue for damages
because his stock is thereby rendered worthless. (Smith v.
Hurd, 12 Met. (Mass.) 871 [46 Am. Dee. 690]; Niles v. New
York Cent. G H. R. R. Co., 176 N, Y. 119 [68 N. BH. 142];
Ames v. American T. & T. Co., 166 Fed. 820; 6a Cal. Jur.
804, sec. 456;'14 C. J. 924, sec. 1444.) In the Niles case,
supra, as here, the stockholder sought to recover damages
at law for the depreciation in the value of his stock, which
depreciation, in common with the loss to other stockholders,
resulted from the acts of the corporate directors. In deny-
ing such relief it is therein declared: “True, the plaintiff
has suffered a depreciation in the value of his stock as a
result of the wrong, and in this respect the injury was
personal to the holders of the stock. But every stockholder
has suffered from the same wrong, and if the plaintiff can
maintain an action for the recovery of the damages sus-
tained by him, every stockholder must be accorded the same
right. The injury, however, resulting from the wrong was,
as we have seen, to the corporation. The depreciation in
the value of the plaintiff’s stock, and that of the other
stockholders, was in consequence of the waste and destruc-
tion of the property and franchise of the corporation.’
In 18 Fletcher, Cyc. Corporations, page 227, section 5913,
the principle is stated as follows: ‘‘individual stockholders
cannot sue corporate officers for damages on the ground of
mismanagement, on the theory that such mismanagement has
rendered their stock of less value or worthless, since the
injury is not to them individually, but to the corporation,
i.e. the stockholders collectively. . . . It is only where the
injury sustained to one’s stock is peculiar to him alone, and

114 Le |

does not fall alike upon other stockholders, that he can re-
cover as an individual.’’

Pointing out that the question is one of first impression in
this state, the plaintiffs urge us to disregard the rule as
announced in the above authorities. This we are not in-
clined to do. The rule is both reasonable and proper. [i
Its application to the present case precludes a recovery by
the plaintiffs, for an examination of the amended complaint,
assuming its allegations to be, true, discloses that plaintiffs
suffered no damage peculiar to them alone. On the con-
trary, they were injured by the same wrong and in common
with all other stockholders in the corporation. The injury
was not to them individually but to the corporation, i. e.,
the stockholders collectively. Under the above authorities,
the plaintiffs cannot, therefore, state a cause of action for
.damages peculiar and individual to therh, Their cause of
action is purely derivative in character. This being so, the
complaint fails to state a cause of action and judgment must
necessarily be given for the defendants. As stated above,
the plaintiffs concede that a conclusion that the action is
derivative is fatal to their position herein. Our conclusion
obviates the necessity of determining whether the cause of
action attempted to be alleged is equitable or legal in its
bearing on plaintiffs’ right to a jury trial.

HI We find nothing in our statutory law opposed to the
above conclusion. At the time of the perpetration of the
alleged fraudulent acts of which complaint is here made,
section 309 of the Civil Code, in the absence of authority
from the commissioner of corporations, prohibited the
directors of a corporation from dividing, withdrawing or
paying to the stockholders any part of the capital stock, for
a violation of which such directors were jointly and sever-
ally liable ‘‘to the corporation, to the full amount of the
capital stock so divided, withdrawn, paid out, or reduced.

. ”? Asit then read, the section did not purport to give to
the stockholders in their individual capacities an independent
and distinct cause of action for the redress of any wrong
or damage suffered by them as the result of such violation.
In other words, no liability was imposed on the directors
in favor of the stockholders in their individual capacities.
In 1929 (Stats. 1929, p. 1266), subsequent to the commis-
sion of the acts here complained of, the section was amended

— 115

to make the erring directors answerable ‘‘to the share-
holders of such corporation to the full amount of any
loss sustained by such shareholders... ’’ The section
was repealed in 1931 (Stats. 1931, pp. 1762, 1815), and
superseded by section 368, Civil Code, wherein directors
eausing an unauthorized division or distribution of corporate
assets among the stockholders were made jointly and sever-
ally liable ‘‘to the corporation and to shareholders and sub-
scribers for the full amount of any loss sustained by the
corporation, the shareholders and/or subscribers’. We need
not here pause to determine whether the amended section
309 or its successor, section 363, imposes a liability upon
erring directors in favor of stockholders in their individual
capacities. Even if such liability were then created, a point
we do not decide, the amendment of the old section and the
enactment of the new, being subsequent in point of time to
the commission of the acts upon which this suit is based,
cannot, in the absence of a contrary legislative intent, be
held to be retroactive. In Estate of Parker, 200 Cal. 182,
142 [251 Pac. 907, 49 A. L. R. 1025], it is declared that
“A statute will not be given a retroactive construction by
which it will impose liabilities not existing at the time of its
passage. Laws which create new obligations, or impose new
duties, or exact new penalties because of past transactions,
have been universally reprobated by civil and common law
writers, and it is to be presumed that no statute is intended
to have such effect unless the contrary clearly appears.’’
[| The dissolution of the defendant corporation prior to
the commencement of this suit did not serve to create such
individual right of action in the stockholders. The defend-
ant corporation is a Delaware corporation. We will take
judicial notice of the fact (Code Civ. Proe., sec. 1875, subd.
8) that the laws of Delaware (chap. 65, Rev. Code of 1915)
continue the corporate existence for three years after disso-
lution for the purpose of prosecuting or defending suits by
or against the corporate entity. The present action was
instituted approximately six months after dissolution and
- when approximately two and one-half years remained within
which a representative suit could have been brought.
HAs stated at the beginning of this opinion, the court
below, upon the failure and refusal of the plaintiffs to intro-
duce any evidence, made findings in favor of the defendant,

716 | |

and gave judgment accordingly. The plaintiffs now con-
tend that the findings are unsupported by the evidence. In
view of our conclusion that the complaint fails to state a
cause of action, the findings are, at most, unnecessary and
superfluous and can in no way detract from the propriety of
the judgment entered. In the trial court the plaintiffs
offered no objection to findings being made in the absence
of any evidence. When the matter of findings was under
consideration counsel for plaintiffs suggested as a form of
finding the following: ‘‘counsel for the plaintiffs refuse to
submit evidence supporting the complaint, therefore the
court finds that the allegations of the complaint are not
true’, The court below accordingly found the material
and substantial allegations of the complaint to be untrue
and it is not for the plaintiffs to now urge that the findings
are unsupported by evidence.

We have examined Chetwood v. California Nat. Bank, 113
Cal. 414 [45 Pac. 704], Bee v. Cooper, 217 Cal. 96 [17 Pac.
(2d) 740], and other authorities cited by the plaintiffs.
They do not suggest a result different from that here reached."
In view of the fact that our conclusion makes it wnneces-
sary to now decide whether the cause of action attempted
to be alleged is legal or equitable in nature, the two cited
cases offer no difficulty. None of the California cases to
which plaintiffs have referred us directly involved the ques-
tion here determined. Plaintiffs necessarily admit this
when, as already stated, they concede that the question is
one of first impression in this state.

HJ im conclusion it should be stated that there is lan-
guage in plaintiffs’ “‘supplemental brief on rehearing”
which tends to indicate a complete change of position on
their part. There is language therein capable of being con-
strued as an assertion on plaintiffs’ part that the action is
“‘derivative’’ and “‘involves and concerns only the rights of
the corporation, though commenced and prosecuted by the
stockholders... ’. Such a position, if now assumed, flies
squarely in the face of plaintiffs’ positive and often-
repeated declaration, both in the trial court and here, that
the action was commenced and prosecuted by plaintiffs in
their individual capacities to recover damages alleged to
have been suffered by them alone and was not prosecuted
for and on behalf of the corporation or the stockholders

| a m1

thereof. Moreover, in denying the request for a jury, the
trial court expressed a willingness to regard the action as
a representative one instituted for and on behalf of the
corporation and its stockholders, indicating to plaintiffs that
appropriate relief would be granted if they proceeded on .
this theory and succeeded in establishing the allegations of
their complaint having to do with the defendants’ alleged
improper disposition of the corporate assets. Plaintiffs de-
clined to proceed on this theory. Under elementary and
fundamental principles, plaintiffs cannot, upon finally dis-
covering the weakness of their cause, completely and radi-
cally alter their theory of the case after rehearing on appeal.
It is now too late for the plaintiffs, in the present proceed-
ing, to change their position and urge the representative or
derivative character of the action.
The judgment is affirmed.

Shenk, J., Preston, J., Langdon, J., and Seawell, J., con-
curred.

[Crim. No. 3669. In Bank—January 31, 1934]

THE PEOPLE, Respondent, v. RAYMOND W. McKEE,
Appellant.

R. W. McKee, in pro. per., Monroe B. Kulberg, Clare
Woolwine and Bourke Jones, for Appellant.

U.S. Webb, Attorney-General, John 8. Richer and Frank
Richards, Deputies Attorney-General, Buron Fitts, Dis-
trict Attorney, and Jesse Frampton and Tracy Chatfield
Becker, Deputies District Attorney, for Respondent.

THE COURT.—A hearing was granted in this case after
decision by the District Court of Appeal, Second Appellate
District, Division Two. For the reasons expressed by us in
People v. Talbot et al., Crim. No. 3668 (ante, p. 3 [28
Pace. (2d) 1057]), we adopt the opinion of Mr. Justice
pro tem. Archbald of said District Court of Appeal as the
opinion of this court. It reads as follows:

“Defendant was charged with grand theft in an indict-
ment containing eighty-nine counts. He was tried jointly
with J. A. Talbot and C. M. Fuller before the court sitting
without a jury, and at the conclusion thereof it was stipu-
lated that the evidence in such case should be the evidence
herein as to counts XVII, XIX and XX, all other counts
being ordered off calendar, also by stipulation. The court
found him guilty as to such counts, and from the judgments
entered thereon and the orders denying his motions for a
new trial defendant has appealed.

Le 779

“Count XVII involves the withdrawal of $1,000 from the
funds of the Richfield Oil Company of California on Sep-
tember 28, 1929, and their use by appellant for his own
personal purposes, count XIX a similar withdrawal and
use of the sum of $2,000 on October 4, 1929, and count XX
the same as to $2,000 on October 22, 1929, the withdrawals,
personal use and the fact that such sums were technically
or constructively in appellant’s possession being admitted
by him.

‘The contentions of appellant here are raised by the
briefs filed in the appeal of McKee in Crim. No. 3668
(ante, p. 8 [28 Pac. (2d) 1057]), files of this court, and
such contentions are discussed and decided in the opinion
this day filed therein.”’

Judgments and orders affirmed.

Rehearing denied.

[Sac. No, 4808, In Bank—WFebruary 28, 1934.]

NEVADA LAND AND INVESTMENT CORPORATION
(a Corporation), Respondent, v. V. E. MUSSER et al.,
Appellants.

A. G. Bailey for Appellants.
Rich, Weis & Carlin for Respondent.

THE COURT.—Appeal from a judgment in an action for
ejectment after attempted cancellation of an installment con-

780 |

tract for the purchase of realty. [J The record in this
case, except for the amounts of the purchase price, the pay-
ments made and damages claimed, is. practically identical
with the record in Nevada Land & Investment Corpora-
tion v. Sistrunk, Sac. No. 4809 (ante, p. 174 [30 Pac. (2d)
389]), in which the opinion of this court has this day been
filed. Upon the authority of that case the judgment herein
is reversed.