text:
    [S. F. No. 15774.
    In Bank.
    July 29, 1938.]
    FLORENCE L. TEN WINKEL et al., Appellants, v. ANGLO CALIFORNIA SECURITIES COMPANY (a Corporation), Respondent.

      Tobias J. Bricca for Appellants.
    Young, Hudson & Rabinowitz for Respondent.
   THE COURT.

This is a suit to quiet title by plaintiff, individually, and as executrix of the last will of her deceased husband, to one of the fifteen apartments in the community apartment house, known as View Tower Apartments, located on Hyde Street in the city of San Francisco, and to an undivided one-fifteenth interest in the real property upon which the community apartment house was built. Plaintiff sought a decree against the defendant, Anglo California Securities Company, which claimed to be the owner of the title to the community apartment building in its entirety and to the realty upon which is was constructed. The defendant company based its claim of ownership upon a trustee ’s deed issued after a sale under a trust deed which covered the realty and the community apartment ho,use building. The defendant filed a cross-complaint to recover the rent of the apartment collected by plaintiff subsequent to the date on which the defendant claims to have acquired title by purchase under the foreclosure sale. Judgment was rendered by the trial court in favor of the defendant, quieting its title to the property set forth in plaintiff’s complaint, and giving judgment for $1235, rent already accrued on said apartment, and for $65 a month rent until the surrender of possession of said apartment by the plaintiff.

The sole question presented for determination is whether plaintiff acquired her interest in the community apartment house free and clear of all encumbrances or whether such interest was acquired subject to a certain deed of trust placed upon the property as a whole on April 30, 1927, and foreclosed on December 21, 1933, upon default in the payment of the promissory note secured by said 'trust deed.

A summary of the various business transactions relative to the acquisition of their interest in said community apartment house by the Ten Winkels, in chronological form, is necessary in order to obtain an accurate picture of the situation.

Prior to 1926, the plaintiff, Florence L. Ten Winkel, and her husband owned an unencumbered lot, located on Southard Court, north of Greenwich Street, in San Francisco, on which stood a two-story building consisting of two flats. The upper flat was occupied by the Ten Winkels and the lower flat was occupied by their tenants. At the same time, title to an adjoining vacant lot, hereinafter referred to as the “Hyde street lot”, stood in the name of Mary Thomas, encumbered by a deed of trust for $13,000 in favor of Anglo California Trust Company. It was stipulated at the trial that the name, Mary Thomas, was a fictitious name used in business transactions by one Cleve Shaffer, a realtor. Each lot had an extensive marine view except that the building on the Southard place lot partially obstructed the view from the Hyde Street lot. During 1926, Cleve Shaffer and Geneva Shaffer, his sister, commenced the promotion of a plan to build a class “A” community apartment house on the Hyde Street lot. This plan involved the acquisition of the Southard Court lot and the tearing down of the two-story building on said lot in order to protect the view of the proposed community apartment house. The proposed community apartment house was to be fifteen stories high with one apartment on each floor. This plan included the incorporation of a nonprofit, nonstock corporation, originally called, “Tower View Community, Inc.”, but subsequently known as “View Tower, Inc.” to hold title to said property. Each member of the corporation was to enter into a lease for one or more apartments, and all the lessees, acting through a board of directors of the corporation, were to maintain and manage the apartment house. The sale price of the different apartments was to vary, and the total sale price of all the apartments was to be $320,365. As a result of the negotiations with the Shaffers, the Ten Winkels became interested in exchanging their Southard Court property for an apartment in the proposed community apartment house. On October 25, 1926, the Ten Winkels acknowledged an instrument signed by them and dated October 18, 1926, entitled “Agreement to Exchange Real Property”. The pertinent portions of said agreement read as follows:

“It is agreed that F. W. Ten Winkel and wife, residents of the City and County of San Francisco, State of California, owners of the following described property situated in the City and County of San Francisco, State of California, to-wit: “All that certain lot, piece or parcel of land situated on the East line of Southard Court, about 107 feet north of Greenwich Terrace, designated and known as No. 1 Southard Court, size of lot being 30 feet by 56 feet, which we desire to exchange for property owned or to be acquired by Tower View (a corporation to be organized), which said property is now in the name of Mary Thomas, widow, and is situated in the City and County of San Francisco, State of California, and «described as follows, to-wit:
“All that certain second floor and its appurtenances, in that certain Class ‘A’ building to be erected on the lot situated on the East line of Hyde Street, 11.2 feet 9 inches north of Greenwich Street running thence Easterly to the Westerly line of Southard Court. Lots 25 feet by 56 feet. Said apartment to be built and constructed as per plans and specifications hereto attached and made a part hereof.
‘1 Terms of Exchange, being as follows:
“In lieu of a cash payment, grant, bargain and sale deed to first property hereinabove described, shall be immediately deposited in escrow with the Title Insurance Company of San Francisco, upon conditions and terms herein specified and not otherwise;
“á. It is further understood and agreed that all costs of upkeep, and expenses for maintaining and running said Tower View apartment building, shall be based and proportioned to said Ten Winkel, his heirs, successors or assigns, on a valuation of Fifteen Thousand ($15,000) Dollars, and no more.
“G. A. Shaffer is authorized to act as agent in negotiating said exchange, and we agree that if the owner of the property secondly above described will exchange said property on said terms and conditions herein specified, we will, within ten days furnish a certificate of title from a reliable abstract company, and a good and sufficient grant, bargain and sale deed, with the restriction above mentioned, conveying title to the property firstly above described.
“It is also agreed that when said agent has secured an acceptance in writing upon the terms and conditions herein contained to make said exchange, and when notice in writing is given to said Ten Winkel that half the apartments in said Tower View are sold, we will deposit with said Title Insurance Company, Fifteen Hundred ($1,500) Dollars, balance of purchase price of said apartment, being the total purchase price of Fifteen Thousand ($15,000) Dollars, and will allow sixty (60) days for the furnishing of satisfactory certificate of title or title search of said property secondly described.
. “Dated October 18, 1926.
“Florence L. Ten Winkel “F. W. Ten Winkel.
“ (Duly acknowledged.) ” 1
On the same day of its acknowledgment, October 25, 1926, this instrument, together with another instrument, entitled, “Acceptance” bearing the purported signature of Mary Thomas, but not acknowledged, was recorded in the office of the recorder of the city and county of San Francisco. Said acceptance is in the following words and figures:
“Acceptance
11 This agreement witnesseth: That Mary Thomas, or Tower View (a corporation to be organized), or agents or assigns, owner of the piece of real estate secondly herein described, hereby accepts the said proposition of exchange upon the terms and conditions herein mentioned, and agree to furnish a certificate of title to said second floor cooperative apartment, the price of which is Fifteen Thousand ($15,000) Dollars free and clear of all liens or encumbrances except those on building as a whole and then to deliver a proprietary lease and proportionate interest in the said cooperative apartment building to F. W. Ten Winkel and -wife, or their assigns, or agrees to pay said Ten Winkel the sum of Thirteen Thousand Five Hundred ($13,500) Dollars for said real property first above described, or redeed said property to said Ten Winkel.
“And we further agree to pay customary commission.
“Dated at 560 Sutter St. this 25 day of September, 1926.
“Mart Thomas.
“(Not acknowledged.)
“Recorded at the request of G. A. Shaffer, Oct. 25, 1926, at 42 min. past 2 p. m.”

The question of whether or not the date, September 25, 1926, was the correct date, or was a clerical error, the correct date being October 25, 1926, is a minor controversy between the parties.

On the same day, October 25, 1926, an escrow with the California Pacific Title and Trust Company was opened and an executed deed of the Southard Court lot to Mary Thomas, together with a copy of the “Exchange Agreement” was deposited by Ten Winkel. (It cannot be determined from the record whether or not the “Exchange Agreement” included the purported acceptance of Mary Thomas.) It was stipulated that this particular deed was never recorded and at the time of the trial remained in the possession of the title company.

On November 23, 1926, a deed from Mary Thomas to Cleve Shaffer to both the Hyde Street lot and the Southard Court lot was executed.

On December 23, 1,926, a deed from Cleve Shaffer to View Tower, Inc., of both pieces of property, the Hyde Street property and the Southard Court property was executed. (Said corporation was not incorporated at the time of the execution of this deed.)

On March 30, 1927, Mary Thomas executed a deed of trust covering the Hyde Street lot to Western American Realty Company, as trustee, in favor of Anglo California Trust Company to secure the payment of $10,000. (This trust deed renewed an existing trust deed on this same property dated April 12, 1922, by Mary Thomas to the same trustee and in favor of the same beneficiary to secure the payment of $13,000.) Mr. and Mrs. Ten Winkel upon the request of the Anglo California Trust Company joined in the execution of this $10,000 trust deed. On April 4, 1927, this deed of trust was recorded. On April 25, 1927, a reconveyance of this $10,000 trust deed was executed.

On April 30, 1927, Cleve Shaffer obtained a building loan of $175,000 from the Anglo California Securities Company to finance the building of the said community apartment house. ($150,000 was actually loaned by the trust company, and $25,000 was allowed as a consideration to the trust company for long term financing in lieu of a bond issue discount.) The method of handling the transaction took the following unusual form. Cleve Shaffer signed an installment promissory note, payable $1486.74 per month, naming Mary Thomas, as payee. This note was endorsed by Mary Thomas and delivered to Anglo California Securities Company. The note on its back contained a guarantee by Mary Thomas and G. A. Shaffer. The deed of trust, executed by Cleve Shaffer, given to secure the payment of said promissory note, named Mary Thomas as beneficiary, and the Anglo California Trust Company, as trustee. (It may be noticed that the deed from Mary Thomas to Cleve Shaffer, dated November 23, 1926, had not yet been recorded and record title to the Hyde Street property stood in the name of Mary Thomas; likewise that there had been no recordation of the deed of Ten Winkels to Mary Thomas of the Southard Court property. It was stipulated at the trial, however, that title to the “View Tower property” was at the date of the execution of the $175,000 trust deed in Cleve Shaffer.) It is to be particularly noted that the Ten Winkels did not join in the execution of this note or trust deed.

On May 9, 1927, the Ten Winkels entered into a written agreement with “Tower View Community, Inc.” (never incorporated). This agreement was signed by Cleve Shaffer, as president, and contains the following provisions: “And the undersigned hereby agrees to purchase an interest in and a lease of Apartment 2 ... of the proposed building, and the undersigned agrees to pay for the same the sum of $15,000 in the following manner: As per trade agreement in escrow with the California Pacific Title Company.”

On May 13, 1927, the Ten Winkels paid the $1500 balance due, and receipt for said payment was given to them by the assistant trust officer of the Anglo California Trust Company.

On May 23, 1927, the trust deed covering both the Hyde Street property and the Southard Court property, in which Mary Thomas was named as beneficiary and the Anglo California Trust Company, as trustee, given to secure the payment of the $175,000 note, was recorded.

On June 1, 1927, another deed from the Ten Winkels to Mary Thomas to the Southard Court lot was executed by the Ten Winkels and on June 4, 1927, recorded.

On June 4, 1927, there was likewise recorded the deed from Mary Thomas to Cleve Shaffer of the Hyde Street and Southard Court property, dated November 23, 1926, and also the reconveyance by the trustee of the $10,000 trust deed to Mary Thomas which had been executed on April 25, 1927, ivas recorded.

On July 11, 1,928, the certificate of the secretary of state certifying the incorporation of View Tower, Inc., was issued, and on August 8, 1928, the by-laws of View Tower, Inc., were adopted.

In November, 1928, the building was completed, and the Ten Winkels moved into apartment No. 2.

On November 10, 1928, a deed from Cleve Shaffer to View Tower, Inc., was recorded, and on November 13, 1928, the board of directors of View Tower, Inc., accepted the property subject to the deed of trust for $175,000.

On November 14, 1928, Ten Winkels signed as lessees a membership holder’s lease. On the same day, November 14, 1928, a membership certificate was issued to the Ten Winkels by View Tower, Inc., signed by Cleve Shaffer, as president, and by the secretary of the corporation.

In 1930, the Ten Winkels leased the apartment to tenants.

On August 23, 1933, a notice of default in the payment of the obligation to secure which the trust deed was given was recorded.

December 21, 1,933, defendant, Anglo California Securities Company, purchased the property on foreclosure for $100,000.

On January 11, 1934, a deed from the trustee to Anglo California Securities Company was recorded.

On May 26, 1934, this suit to quiet title was commenced.

On November 5, 1934, Florence L. Ten Winkel and the Anglo California Securities Company entered into a written agreement for the collection and escrowing of the rental of said apartment until the final determination of this litigation, said accrued rental to be paid over in accordance with the final judgment in this action.

At the outset it should be stated that no question is raised as to the regularity and legality of the sale upon the foreclosure of the trust deed other than to question whether the trust deed was actually in default at the date of the notice of default. The evidence is amply sufficient, not only to' support, but to compel the conclusion, that the obligation was in default on said date. Neither is any question raised with reference to the title to the Southard Court property. The sole question, therefore, for determination is whether the plaintiff acquired any interest in the Hyde Street property of such a nature that she could not be divested of said interest by the foreclosure of the $175,000 trust deed.

An analysis of the transactions between those interested in the exchange of properties prior to April 30, 1927, the date of the execution of the $175,000 trust deed, discloses two possible theories upon which the trial court could justifiably base its decision in favor of defendant. One theory is based upon the acceptance of the authenticity of the written acceptance, and the fact that it constituted a part of the “Exchange Agreement”. The other theory is predicated upon an entire elimination of the written acceptance from consideration. Whichever theory the trial court adopted in reaching its decision in favor of the defendant, its conclusion was amply supported by the evidence relative to the transactions occurring before April 30, 1927, and is strongly corroborated by the conduct of the Ten Winkels subsequent to said date. Appellant claims that there is another possible construction of the effect of these transactions which would warrant a judgment in her favor. Such construction, however, in the light of the record does not appear plausible to us, and moreover this theory is completely contradicted by the evidence relative to the course of conduct of the Ten Winkels subsequent to April 30, 1927. We shall discuss all three theories.

Respondent argues that the Ten Winkels proceeded with the transaction for the exchange of properties upon the basis of the written acceptance of Mary Thomas, introduced in evidence in the form of a certified copy attached to the written offer of the Ten Winkels which had been recorded. Ignoring for the moment the question of the due execution of said document by Mary Thomas, there can be no doubt, of the existence of such a document by reason of the fact that it was recorded in conjunction with the written offer of the Ten Winkels, and counsel for the appellant so stipulated. There is evidence in the record in the form of carbon copy receipts of the California Pacific Title and Trust Company establishing the fact that on October 25, 1926, the same day on which said offer and acceptance were recorded, Mr. Ten Winkel opened up an escrow with said title company, and deposited therein a deed from himself and wife as grantors to Mary Thomas of their Southard Court property, together with an ‘1 Exchange Agreement”. If the exchange agreement consisted of the offer by the Ten Winkels and the written acceptance by Mary Thomas, then the trial court was amply justified in concluding that the Ten Winkels, by depositing their deed, together with the exchange agreement, in escrow with the California Pacific Title and Trust Company, signified their assent to the terms of said written acceptance, and consummated said deal with full knowledge that one of the terms thereof was that the owner of the Hyde Street property was to furnish a certificate of title to the second floor cooperative apartment free and clear of all liens and encumbrances except those on the bmlding as a whole. If the completed contract provided that the interest acquired by the Ten Winkels was to be subject to all liens and encumbrances on the building as a whole, the Anglo California Securities Company who loaned the promoters of the community apartment house the sum necessary for the erection of the apartment house, was justified in loaning their money upon the assumption that the entire building was covered by the trust deed given to secure the $175,000 promissory note and was justified in its contention that upon a regular and proper foreclosure of said trust deed upon default in the payments, it secured title to the community apartment house free from any claim by the Ten Winkels.

The written acceptance, in that it varied the terms of the original offer, at most constituted a qualified acceptance and in effect constituted a counter-offer on the part of the original offeree, Mary Thomas. There is no contention made that there was ever any express written acceptance by the Ten Winkels of this counter-offer, but the fact that the Ten Winkels deposited their deed to the Southard Court property, together with this ‘1 Exchange Agreement” (assuming that the exchange agreement included a copy of the qualified acceptance by Mary Thomas) indicates that they accepted the terms of the counter-offer.

The conclusion that the Ten Winkels had knowledge of the written acceptance of Mary Thomas and were cognizant of its terms, although perhaps not fully aware of the possible effect of the inclusion therein of the provision that the certificate of title to be furnished for the community apartment house should show title free and clear of all liens and encumbrances, except those on the building as a whole, and signified their acceptance of said terms by the deposit of said documents in escrow, is strongly fortified by their conduct in the business transactions which occurred subsequent to April 30, 1927, the date on which the $1,75,000 encumbrance was placed upon the property. On November 13, 1928, the board of directors of View Tower, Inc., by resolution authorized the acceptance from Cleve Shaffer of the apartment house building subject to the $175,000 encumbrance, thereby recognizing the obligation against the property. On November 14, 1928, the Ten Winkels received their membership certificate which provided that 11 The member above named (Florence L. Ten Winkel and F. W. Ten Winkel) hereby consents to and accepts the Articles of Incorporation and By-Laws of this corporation as obligatory upon him”. In the by-laws, which had been adopted August 8, 1928, it was provided that “the property, business and affairs of the corporation shall be managed and controlled by a Board of Directors”, and that “all leases shall be subject to any mortgage or deed of trust which may be of record at the time of the execution of such lease”. Furthermore, on November 14, 1928, the Ten Winkels entered into a written membership holder’s lease which contained this provision: “And it is expressly stipulated and agreed that this lease is subject to any mortgage or mortgages, or trust deed that may from time to time be executed by the corporations as above specified and duly recorded, or that may have been so executed or assumed by the corporation to secure the erection of said building.” It is not reasonable to suppose that the Ten Winkels signed the membership holder’s lease which by express terminology subjected their interest to the encumbrance already on the property and duly recorded, or accepted the membership certificate upon the condition that the by-laws of View Tower, Inc., should be binding upon them, which by-laws likewise subjected their interest to said encumbrance, if they in fact owned an absolute interest in the community apartment house property free from any encumbrance thereon, and had never agreed by previous contract that they should take their interest subject to an encumbrance. It is true that these transactions occurred subsequent to the date on which the $175,000 encumbrance was placed on the property, but they are convincing corroborative circumstances of the correctness of the conclusion that the Ten Winkels knew and acquiesced in the exchange of property upon the terms included in the written acceptance. It is not incredible that the Ten Winkels were willing to enter into such an agreement, although it has turned out to be a bad bargain for them by virtue of this particular provision subjecting their interest to an encumbrance on the building as a whole. It must be borne in mind that the transaction occurred previous to the depression and if all those who had purchased leases in the comm unity apartment house had been able to perform their obligations, doubtless the transaction would have been a financially advantageous one for the Ten Winkels. Although now, in the light of the bitter lessons learned from the depression, such an agreement seems highly imprudent, at the time it was entered into it may well have seemed to the Ten Winkels to present an excellent opportunity for financial gain.

This view of the transactions of the parties, that the Ten Winkels accepted the counter-offer of Mary Thomas, expressed in the written acceptance, as evidenced by the escrow transaction, affords a reasonable explanation for the action of the defendant company in requiring the Ten Winkels to join in the execution of the trust deed executed by Mary Thomas, dated March 30, 1927, for $10,000, given to renew the loan which had previously been for $13,000, and its failure to require the Ten Winkels to join in the execution of the promissory note for $175,000 and the trust deed given to secure its payment. The latter encumbrance was on the “building as a whole” and was given “to secure the erection of said building”, and if the Ten Winkels had acquired an interest in the Hyde Street property, by virtue of the agreement between the parties, subject to such encumbrance, their signatures would not be necessary to subject their interest to that encumbrance. It would, however, have been necessary to subject their interest to the $10,000 trust deed which was not on the building as a whole but was given to renew a prior encumbrance in no way related to the erection of any building on the property.

There are two objections to the theory of an acceptance by the Ten Winkels of the counter-offer contained in the written “acceptance” of Mary Thomas. The first objection is that it cannot be ascertained with certainty that the documents deposited in escrow by Mr. Ten Winkel actually included the written acceptance. The written offer of the Ten Winkels was entitled, “Agreement to Exchange Real Property”, and the receipt of the title company admitted the receipt of the deed from the Ten Winkels, and an “Exchange Agreement”. It is possible, therefore, that the receipt only referred to the written offer, and that the Ten Winkels did not in fact have notice of the written acceptance.

The other objection, and we think it is a valid one, is that the written acceptance was improperly admitted in evidence over the objection of counsel for the plaintiff, and cannot, therefore, form a basis for affirming the judgment on appeal. Upon the offer in evidence of the written acceptance in the form of a certified copy of the records of the recorder’s office, showing both the written offer and immediately following it, the written acceptance, counsel for plaintiff objected to its admission upon the ground that no proper foundation had been laid. During the discussion which followed, counsel for the plaintiff stated that he was willing to stipulate that the document formed part of the records of the office of the recorder, but that it had not been acknowledged, and he could not stipulate to the signature of Mary Thomas. We think this was a sufficient objection to the evidence upon the ground that no proof of the due execution of the document had been offered by the counsel for the defense. It was not acknowledged and was, therefore, not entitled to recordation. The fact that although not entitled to be recorded it was in fact recorded in conjunction with another document which was entitled to be recorded, cannot give said document any greater sanctity than it is entitled to in its own right, and cannot grant it immunity from the requirement, applicable to all unrecorded instruments, that their due execution must be established as a proper foundation for their introduction in evidence. Neither was it rendered admissible in the absence of proof of its due execution by virtue of the provisions of section 1850 of the Code of Civil Procedure to the effect that, “Where the declaration, act, or omission forms a part of a transaction, which is itself the fact in dispute, or evidence of that fact, such declaration, act or omission is evidence as part of the transaction.” Until its due execution by Mary Thomas had been established, there was no proof that this written acceptance was any part of the transaction for the exchange of the properties. In addition to the objection to the admission of this instrument in evidence, a motion to strike was made, which through inadvertence was not acted upon by the trial court. In the absence of the slightest attempt to prove the due execution of said document, the objection to its admission should have been sustained, and having been improperly admitted, the motion to strike should have been subsequently granted.

We have deemed it advisable to give consideration to the written acceptance by reason of the fact that both parties in their briefs have discussed at considerable length its authenticity and possible effect. However, we are of the opinion that the judgment of the trial court was predicated, not upon a consideration of the written acceptance and the conclusion that the Ten Winkels had accepted said counteroffer, but upon the fact that plaintiff utterly failed in the trial court to sustain the burden upon her of establishing by competent proof a consummated contract whereby she and her husband acquired an absolute interest in the Hyde Street property prior to April 30, 1927, the date of the execution of the $175,000 trust deed. Plaintiff repudiated any knowledge of said written acceptance and testified upon the stand that she did not remember ever having seen the document other than in her attorney’s office after her suit to quiet title was commenced. However, if the written acceptance be eliminated from consideration, we are confronted with the situation where we are left with only the written offer. The existence of an acceptance is necessary and essential to a completed contract. The burden was upon the plaintiff in order to recover to establish such a completed contract that by its terms she had acquired an interest in said Hyde Street property prior to the' execution of said $175,000 trust deed. The first evidence of a definite contract is to be found in the membership holder’s lease entered into between the Ten Winkels and View Tower, Inc., on November 14, 1928, in which she acquired her interest subject to the prior encumbrance upon the property. There is an absence of evidence of any contract coming into being prior to April 30, 1927, whereby the Ten Winkels acquired an interest in the Hyde Street property.

A perusal of the findings of the trial court indicates that its decision was based upon a conclusion that the Ten Winkels acquired no interest by virtue of a consummated contract prior to April 30, 1927, for the findings expressly state with reference to the undivided one-fifteenth interest in the realty claimed by appellant, that, “It is not true that plaintiffs or either of said plaintiffs ever have been or now are the owners” of any interest in said real property. The findings with reference to the apartment are to the effect that “It is not true that Florence L. Ten Winkel, individually or as executrix of the last will and testament of F. W. Ten Winkel, deceased, was at any time subsequent to December 21, 1933 (the date of the sale under foreclosure) the owner or in possession of the following described property,” (describing the apartment). The membership holder’s lease provided merely for the owning of a lease by the Ten Winkels of the designated apartment, the title to the realty and to the community apartment house being held by View Tower, Inc. These findings would indicate therefore that the Ten Winkels acquired their interest by virtue of their membership holder’s lease subsequent to April 30, 1927, since the trial court found that they never did become the owners of any interest in the realty. If the Ten Winkels acquired said interest upon the execution of said membership holder’s lease, this interest was of course subject to the $175,000 trust deed, a prior encumbrance upon the property, and was wiped out upon the sale under the foreclosure of the $175,000 trust deed. However, it is sufficient simply to say that the record fails to show that the proposition for the exchange of the Southard Court property by the Ten Winkels for an interest in the Hyde Street property ever progressed to the state of a consummated contract prior to April 30, 1927. The burden was upon the plaintiff to establish this fact, and having failed to dó so, the court was compelled to find in favor of the defendant.

It is plaintiff’s claim, as we understand it, that the contract was a unilateral contract which consisted of the original offer of the Ten Winkels, duly acknowledged and recorded, and the acceptance by Mary Thomas of the consideration offered with the proposal (the deed by the Ten Winkels to their Southard Court property). Section 1584 of the Civil Code provides that, “acceptance of the consideration offered with a proposal is an acceptance of the proposal”. The written offer, together with an acceptance of the benefit therefore, according to plaintiff, constituted the contract. It may be conceded that such an inference could possibly be drawn. But such inference is absolutely contradicted by the subsequent conduct of the original offerers, that is to say, by the acceptance of the membership certificate by the Ten Winkels and their execution of the membership holder’s lease subjecting their interest to the encumbrance on the building as a whole. However, it suffices to say, that the trial court did not accept this theory of the transactions of the parties. In our opinion, as we have previously indicated, the trial court was amply warranted in reaching the opposite conclusion.

We have not included in our discussion any reference to the written contract between the Ten Winkels and Tower View Community, Inc., of May 9, 1927, to exchange their property as “per trade agreement in escrow with the California Pacific Title Company”. Tower View Community, Inc., was not incorporated at that time, or ever, and we are of the opinion that said agreement neither adds to nor detracts from any of the rights of either party. Neither have we discussed the question of constructive notice because it is not materially involved herein. The respondent freely admitted not only constructive notice of the written offer of the Ten Winkels but actual notice of it.

It follows from what we have hereinbefore said that the interest in the Hyde Street property acquired by appellant was subject to the $175,000 trust deed, and being so subject, appellant’s interest in said community apartment house was foreclosed by the sale under the foreclosure of said trust deed.

The motion of respondent to take additional evidence is denied. The judgment of the trial court is hereby affirmed.

Rehearing denied.


source: Caselaw Access Project

author: CURTIS, J.

license: Public Domain

text:
    [S. F. No. 15995.
    In Bank.
    August 1, 1938.]
    CHARLES MUDRICK, a Minor, etc., Respondent, v. MARKET STREET RAILWAY COMPANY (a Corporation) et al., Appellants.

      Wm. M. Abbott, Cyril Appel and Ivores R. Dains for Appellants.
    Donahue, Richards & Hamlin, as Amici Curiae, on Behalf of Appellants.
    Vincent W. Hallinan, Charles H. Fish and William F. Herron for Respondent.
   CURTIS, J.

We adopt the following statement of facts and conclusions of law from the opinion of the District Court of Appeal rendered in this action when it was before said court.

“From a judgment awarding the plaintiff damages in the sum of $42,500, the defendants have appealed and have brought up a typewritten record.

“On September 18, 1934, the plaintiff, then thirteen years of age, was injured in an accident between Eighteenth and Nineteenth Streets on Castro. In the accident a street car operated by Market Street Railway Company, hereinafter referred to as railway, ran over the feet of the plaintiff and both legs were amputated below the knees. One of the defendants, G. Hageman, was the gripman and C. J. Hcffernan was the conductor. It was the theory of the plaintiff that he boarded a Fillmore street car, paid his fare, took a transfer to a Castro street car, transferred at Church and Market, took a transfer and at Eighteenth and Castro he changed to the cable car. Continuing, he claimed that in doing so he took a position standing on the running board at the extreme front end of the right-hand side, and was facing to the south, that is to the front, and was holding on to a stanchion with his left hand. After the car had moved about half a block the plaintiff claimed that the car jerked several times, that he lost his grip, slid down the stanchion, fell off the car, and that his legs passed forward under the front wheel and were run over. On the other hand it was claimed by the defendants that immediately prior to the accident the plaintiff ran along the street by the side of the car, attempted to board it, slid and fell, and that his legs pressed forward under the right front wheel of the ear and were run over.

“Castro street cable car number five, the car involved in this accident, left Eighteenth street and was traveling south in the direction of the Lick school. There were on board several adults, but the larger part of the passenger list was made up of students on their way to attend the Lick school.

“On the day of the accident Arthur B. Minaker, a police officer, called on the plaintiff at the hospital, asked him certain questions and later made a report to his superior officer. Either on the day of the accident or the following day, Mr. J. C. Bowman, principal of Lick school, called all students who had been on the car into the auditorium. He asked each child who claimed to know anything about the accident to write out and hand in a written statement. Many such statements were handed in. After the accident and before the trial representatives of the plaintiff called on various witnesses and obtained written statements. During the same period representatives of the defendants called on several of the witnesses and obtained written statements. Many of those written statements were produced at the trial.

“The defendants earnestly contend there is no testimony credible, or otherwise, from which it could be fairly inferred that there was any unusual jerking of the car of sufficient violence to cause plaintiff to fall therefrom, and giving full faith and credit to every scrap of testimony in the record pertaining to jerking, results in the inevitable conclusion that such jerking as did occur was not the cause of plaintiff’s fall or injury. The plaintiff took the stand as a witness in his own behalf and testified that when car number-five was at a standstill at Eighteenth and Castro he boarded the ear and took the position hereinabove indicated. He testified regarding several jerks of the car and that finally he was thrown to the street, run over, and suffered the injuries complained of. Herbert McCulla testified that he boarded the car at the same time and place, took a position on the same side of the car about three feet behind the plaintiff and was holding on to the second stanchion. Continuing he gave testimony corroborating the plaintiff. Frank Pétalas, another schoolmate, testified that he boarded the ear at the same time and place, took a position at the extreme rear end on the right-hand side, and from that position he observed the plaintiff at all times, and saw him fall off the car into the street. Other schoolmates testified to other facts corroborating the plaintiff in part. The plaintiff did introduce some testimony that the car jerked. Taking that testimony in connection with the fact that the plaintiff fell or was thrown to the street, the determination of the issue was properly left to the jury. (McIntosh v. Los Angeles Ry. Corp., 7 Cal. (2d) 90, 96 [59 Pac. (2d) 959].) In this connection we understand the defendants to claim that the plaintiff did not say his fall and the jerking happened simultaneously. As we read his testimony we gather the same impression. The defendants contend the plaintiff testified the jerking occurred at one spot and that he fell off the ear at a point 260 feet distant therefrom. That statement is true but the witness testified to several different jerks. He did not testify his falling and jerking were simultaneous events, nor did he testify to the contrary. However, taking all of the testimony given by all of the witnesses produced by the plaintiff, the record was such that the jury was entitled to find that from the time the plaintiff boarded the car and until he fell into the street there were several jerks and that one of the jerks caused him to fall. That there was evidence to the contrary will be freely conceded. However, we think it is equally true there was sufficient evidence for the jury to base a finding and it may not be said, as a matter of law, that such evidence was incredible, improbable, or impossible.

“The next point made by the defendants is that the trial court erred in instructing the jury on the doctrine of res ipsa loquitur. It was the contention of the plaintiff, as set forth in his amended complaint, that .the accident arose by reason of (1) the negligent operation of the ear and (2) the negligent overcrowding of the car. To those claims, in his opening statement, the plaintiff attempted to add that the car (3) was old and obsolete, (4) that the ear was undermanned, (5) that the railway jammed the school children into the ear like sardines, (6) that when the car was overcrowded the cable would move the car by jerks, and (7) at such times the children would be jerked forward and backward. In his brief the plaintiff adds a further specification (8) that immediately before he fell the plaintiff called to the gripman to stop the car and the call was ignored. Pointing to the fact that after alleging general negligence the plaintiff alleged specific negligence, to wit, overcrowding of the car, the defendants assert that there was no place in this case for the application of the doctrine of res ipsa loquitur. The point has been directly ruled against the contention of the defendants. (McComas v. Al. G. Barnes Shows Co., 215 Cal. 685, 697 [12 Pac. (2d) 630].) The other contentions made by the plaintiff during the presentation of his case and by us numbered 3, 4, 5, 6, 7 and 8, if they had also been alleged in his pleading would have constituted other specific allegations of negligence and would not have changed the rule. ’ ’

At the request of the plaintiff, the court gave three instructions upon the doctrine of res ipsa loquitur. These instructions are as follows, except that we have inserted in brackets the word “unusual” before the word, “operation” in two of said instructions, and before the word, “movement” in the other.

“XVIII

“Proof of an injury to a passenger on the car of a common carrier, caused by the [unusual] operation of the car, raises the legal presumption that the injury was caused by the negligence of the carrier and casts upon the carrier the burden of proving that such injury was caused by some unavoidable casualty, or by some other cause which human care and foresight could not prevent or by the contributory negligence of the passenger, unless these facts be shown by evidence adduced by the plaintiff.

“XIX

“When it was shown that a passenger is injured from some [unusual] movement of the car by those in charge of it or from something connected therewith or in the control of the defendant, the law presumes prima facie that the particular thing thus shown to have caused the injuries was due to the defendant’s neglect, and the burden is then thrown upon the defendant to establish that such injury was not caused by its neglect but by some inevitable casualty or other cause which human care and foresight could not have prevented or by the contributory negligence of the passenger, unless such facts be shown by evidence adduced by the plaintiff.

“XX

“If you believe from the evidence that the plaintiff became a passenger upon the cable car of the defendant Market Street Railway Company and that thereafter, owing to some [unusual] operation of the car by the persons in charge of it, he was injured, then the law presumes that he was injured through the negligence of the defendant Market Street Railway Company, and if you find that his injury was caused by some negligence, however slight, of defendant or of its agents or employees acting in the course and scope of their employment, and that the plaintiff was free from contributory negligence, then your verdict shall be in favor of the plaintiff and against the defendant Market Street Railway Company.”

Defendants contend that these instructions as given incorrectly apply the rule of res ipsa loquitur in this case, and that the word, “unusual” should have been inserted before the words, “operation” and “movement” as indicated by the instructions as set forth above.

In support of their contention that these instructions are erroneous by reason of the omission of the word, “unusual” as applied to the operation or movement of the ear, the defendants mainly rely upon the cases of Steele v. Pacific Elec. Ry. Co., 168 Cal. 375 [143 Pac. 718] , and Rystinki v. Central California Traction Co., 175 Cal. 336 [165 Pac. 952]. In the Steele case the plaintiff claimed to have been injured while she was stepping off of defendant’s car, due to the negligent starting of the ear by defendant’s employees. Defendant denied the charge, and claimed that plaintiff was guilty of contributory negligence by attempting to step off of the car while it was in motion. The court gave the following instruction, the italicized portion of which was held to be erroneous: “You are instructed that contributory negligence on the part of the plaintiff cannot be presumed from the mere fact of injury, but must be proved. On the other hand the proof of injury of plaintiff on a car of the defendant casts upon the defendant the burden of proving that the injury was occasioned by inevitable casualty or some other cause which' human care and foresight could not prevent or by the contributory negligence of the plaintiff.”

It will be noted that in this instruction the jury was told that the mere proof of injury to plaintiff on defendant’s car cast upon the defendant the burden of proving the absence of negligence on its part, or contributory negligence. In that instruction nothing was said as to the injury being caused by the movement or operation of the car. For such omission the instruction was erroneous. It differed materially from the three criticized instructions in the present ease which expressly referred to the injury as, “caused by the operation [or movement] of the ear”. This difference in the wording of the instruction in that case and those in the instant ease was pointed out in the opinion in the Steele case in the following language: “It is not the law, as the argument of the plaintiffs implies, that the mere fact that a passenger is injured while aboard a car, or while alighting therefrom, creates a presumption that the injury was caused by want of care on the part of the defendant operating such car. It must first be shown that the injury came from the movement of the car by those in charge of it, or from something connected therewith, or in control of the defendant. When this is done, the law then presumes, prima facie, that the particular thing thus shown to have caused the injury was due to the defendant’s negligence, and the burden is thrown upon the defendant to disprove the prima facie case thus made. Such negligence is presumed because such accidents do not ordinarily happen if due care is used and because the defendant is usually better able than the plaintiff to show the actual truth of the matter.” To the same effect is the case of Wyatt v. Pacific Elec. Ry. Co., 156 Cal. 170 [103 Pac. 892].

It will thus be seen that Steele v. Pacific Elec. Ry. Co., supra, not only fails to support defendants’ contention that the three instructions are erroneous by reason of the omission of the word, “unusual” therefrom, but it is express authority for upholding them against the particular attack which defendants make, for it is stated therein in plain words that if injury “come from the movement of the car by those in charge of it . . . the law then presumes, prima facie, that the particular thing thus shown to have caused the injury was due to the defendant’s negligence, and the burden is thrown upon the defendant to disprove the prima facie case thus made”.

It will be noted that the court in referring to the movement of the car which was the cause of the plaintiff’s injury does not state that this movement must be “unusual” nor is there anything in the whole opinion that intimates in the slightest degree that the movement of the ear in causing an injury to a passenger must be unusual before the rule contended for in said three instructions is applicable.

It is only fair to defendants to state that they do not rely upon the case of Steele v. Pacific Elec. Ry. Co., supra, standing alone to support their contention, but they contend that that case taken in connection with the case of Rystinki v. Central California Traction Co., supra, sustains them in their contention that these three instructions are erroneous.

In this last-named case, the instruction was as follows: “You are instructed that contributory negligence on the part of the plaintiff cannot be presumed from the mere fact of injury but must be proved. On the other hand, proof of the injury, coupled with proof that it proceeded from a sudden, unitsual or violent jerking, or swinging, or swaying of the car, while the plaintiff was preparing to alight, casts upon the defendant the burden of proving that the injury was occasioned by inevitable casualty or some other cause which human care and foresight could not prevent, or by contributory negligence of the plaintiff.” In commenting upon this instruction, the court used the following language: “With the exception of the italicized portion, this is the same instruction condemned in Steele v. Pacific Elec. Ry. Co., 168 Cal. 375-377 [143 Pac. 718], but the addition of the words in italics rescues the instruction from the vice of the court’s direction to the jury which we there reviewed. It is true that the mere injury to the passenger does not place upon the carrier the duty of explanation, but the establishment of such injury, coupled with proof of coincident and causal collision, derailment, or other unusual happening to the ear, does cast upon defendant the burden of exculpation as indicated by the instruction.”

Defendants seize upon the word, “unusual” as used by the court in the above statement, and contend that the court has by its use determined that before the rule of res ipsa loquitur can be applied in a case where a passenger is injured by the movement of a street car, he must show that the movement was an unusual one. Evidently in the language used, the court simply followed the wording of the instruction which contained the word, “unusual”. We have been cited to no other authority which holds that the movement of a car which inflicts injury upon a passenger must be shown to be an unusual movement before the rule of res ipsa loquitur can be applied. We have already referred to the cases of Wyatt v. Pacific Elec. Ry. Co., supra, and Steele v. Pacific Elec. Ry. Co., supra, where the true rule is announced and where there is no mention or any intimation which supports defendants’ contention. Undoubtedly many other authorities could be cited if necessary, but we deem the above cases and the authorities therein cited to be sufficient for our present purpose.

An instruction alike in principle to these three criticized instructions was approved by the District Court of Appeal in the ease of Lynch v. Market Street Ry. Co., 130 Cal. App. 433, 438 [19 Pac. (2d) 1009], in which we denied a petition for a hearing. In that case the court goes into the question in great detail, citing many authorities, including those cited herein and many others, and holds that the instruction was proper, and affirmed the judgment in favor of plaintiff in said action.

The defendants cite the case of McIntosh v. Los Angeles Ry. Corp., 7 Cal. (2d) 90, 95 [59 Pac. (2d) 959]. There is nothing in that ease that conflicts with anything that we have stated herein. No question was raised in that case involving the rule of res ipsa loquitur. We simply held there that a passenger upon a street or electric car assumed the ordinary risks arising from the operation of such car, and that any injury thus sustained could not be attributed to the negligent operation of the ear, but that the carrier was liable for any injury sustained by a passenger as a result of an unusual movement of the car.

It is further contended that these three instructions are erroneous for the reason that the words “presume”, and “presumption” are used therein instead of the words, “infer” and “inference”. While it appears to be well settled that under the rule of res ipsa loquitur an inference and not a presumption arises on proof by plaintiff of the necessary facts (Sweeney v. Erving, 228 U. S. 233 [33 Sup. Ct. 416, 57 L. Ed. 815, Ann. Cas. 1914D, 905], O’Connor v. Mennie, 169 Cal. 217 [146 Pac. 674], Dowd v. Atlas Taxicab & Auto Service Co., 187 Cal. 523 [202 Pac. 870], Crooks v. White, 107 Cal. App. 304 [290 Pac. 497], and Ireland v. Marsden, 108 Cal. App. 632 [291 Pac. 912]), these terms are often erroneously used interchangeably, and as conveying the same meaning. We find that many lawyers and courts as well make this same mistake. We question whether the ordinary layman, to say nothing of many members of our profession, clearly comprehends the difference in the meaning of these two expressions. While courts have frequently called attention to the erroneous use of the terms, “presume” and “presumption ’ ’ in stating the rule of res ipsa loquitur, no decision has been called to our attention in which a judgment has been reversed by reason of the erroneous use of these words. While it may be error, the error, in our opinion, has not prejudiced the defendants in any of their rights.

The instruction as to contributory negligence was not erroneous. (Brizzolari v. Market Street Ry. Co., 7 Cal. App. (2d) 246 [46 Pac. (2d) 783]; Shannon v. Central-Gaither Union School Dist., 133 Cal. App. 124 [23 Pac. (2d) 769]; 19 Cal. Jur. 623.) In this instruction, the court admonished the jury that a carrier of passengers owes to children who are passengers on its cars a greater degree of care than it owes to adults. Such an instruction is proper. (10 Cor. Jur. 898; 4 B. C. L. 1161.)

It is further contended by defendants that the verdict, even after its reduction from $50,000 to $42,500 is excessive. This contention presents a most difficult question, made so principally by reason of the fact that the law furnishes no yardstick by which to measure damages for personal injuries. As a result there is no unanimity in the decisions of the various courts of this and other jurisdictions. The question may probably be rendered more simple if we confine our investigations to decisions of the courts of our own state, without extending our explorations into the myriad of decisions rendered in foreign jurisdictions.

While the law furnishes no accurate means of measuring damages in personal injury cases, the rule is well established respecting the power and duty of an appellate court in considering that subject and has been stated as follows: “The amount of damages in such cases is committed first to the sound discretion of the jury, and next to the discretion of the judge of the trial court, who, in ruling upon the motion for a new trial, may consider the evidence anew, determine anew the facts, and set aside the verdict if it is not just. Upon appeal, the decision of the trial court and jury on the subject cannot be set aside unless the verdict is ‘so plainly and outrageously excessive as to suggest, at first blush, passion or prejudice or corruption on the part of the jury’. (Aldrich v. Palmer, 24 Cal. 513, 516; Wheaton v. North Beach & M. R. R. Co., 36 Cal. 590, 591; Lee v. Southern Pacific Co., 101 Cal. 118 [35 Pac. 572]; Howland v. Oakland etc. Co., 110 Cal. 513, 523 [42 Pac. 983]; Swain v. Fourteenth St. Co., 93 Cal. 179, 185 [28 Pac. 829].) ” (Hale v. San Bernardino Valley Traction Co., 156 Cal. 713, 715 [106 Pac. 83]; Lahti v. McMenamin, 204 Cal. 415 [268 Pac. 644].)

In following this well-established rule, however, the courts should endeavor in ruling upon verdicts fixing the amount of damages in personal injury cases to establish some uniform standard applicable to cases of this character. This can only be done by reference to other cases in which damages have been fixed and determined in personal injury eases of the same, or like, general nature. By reference to our decisions, we find that verdicts have been sustained in the following cases: $20,000 for the loss of one foot, Rogers v. Interstate Transit Co., 212 Cal. 36, 43 [297 Pac. 884]; $20,000 for serious injury to one foot, Kraft v. Acme Stevedore Co., 112 Cal. App. 653 [297 Pac. 585], hearing denied by this court; $28,191 for fracture of one leg and crushing of one foot, Bisinger v. Sacramento Lodge No. 6, 187 Cal. 578 [203 Pac. 768]; $25,000 reduced from $35,000, loss of one leg slightly below the knee, Jaques v. Southern Pacific Co., 8 Cal. App. (2d) 738, 741 [48 Pac. (2d) 63], hearing denied by this court; $50,000 serious injury to brain, Kirschbaum v. P. H. McCarthy, Jr., 5 Cal. (2d) 191 [54 Pac. (2d) 8]; $70,000 reduced from $100,000 for loss of both legs and one arm, Zibbell v. Southern Pac. Co., 160 Cal. 237 [116 Pac. 513] ; $100,000 for serious brain injury to officer in navy with life expectancy of 32% years, McDonald v. Standard Gas Engine Co., 8 Cal. App. (2d) 464, 473 [47 Pac. (2d) 777]. To these might be added many others of a similar character. It will be noted that in one case a verdict of $20,000 for a loss of one foot was sustained and in another case a verdict of $25,000 for loss of one leg slightly below the knee, and in still another, a verdict of $20,000 for serious injury to one foot was sustained. In the other cited cases, the verdicts are still larger. In comparison with these amounts, it cannot be said that the present judgment for $42,500, in favor of a boy, thirteen years of age, in good health, for the loss of both legs below the knees is out of line with the former amounts sustained by us in actions of this character. The size of the verdict in this case was undoubtedly given the most careful consideration by the trial court as evidenced by its action in reducing the verdict to the sum of $42,500. In view of the very serious injury sustained by plaintiff, and taking into consideration the former adjudications of this court respecting verdicts in personal injury cases similar to that in the instant case, we cannot say that the amount of the judgment in this case is excessive.

Finally it is contended that the counsel for the plaintiff was guilty of prejudicial misconduct. The specifications of misconduct include remarks made by counsel in his opening statement before the jury, in the cross-examination of witnesses during the trial, and in his opening and closing address to the jury after the close of the evidence. Plaintiff objects to our consideration of any statement purported to have been made by counsel in his opening or in his closing argument to the jury on the ground that these statements arc not properly before us. The reporter’s transcript contains counsel’s opening statement to the jury, the evidence taken at the trial including the criticized- remarks of counsel during the cross-examination of witnesses, but does not contain his opening or closing argument before the jury. It does, however, contain the proceedings before the court on motion for a new trial which includes an affidavit of counsel for the defendants purporting to set forth the material parts of the opening and closing argument of plaintiff’s counsel, and an affidavit of plaintiff’s counsel in which he denied making many of the statements included in opposing counsel’s affidavit, and also attempted to explain many of the other statements made by him and included in his argument before the jury as called forth by the argument of defendants’ counsel.

We must assume as the trial judge denied defendants’ motion for a new trial that he was not satisfied with the correctness of the allegations in the affidavit of defendants’ counsel and was of the opinion that the explanation given by plaintiff's counsel as to the reasons that prompted certain portions of his closing statement were well founded. In this state of the record, we find it impossible to properly pass upon those assignments of misconduct of plaintiff’s counsel which are based upon statements made by him in his opening and closing argument to the jury. This leaves only the remarks of counsel for plaintiff in his opening statement to the jury, and remarks made by him during the progress of the trial.

It is contended that in his opening statement plaintiff’s counsel represented to the jury the existence of certain facts which plaintiff was prepared to prove, but which plaintiff did not attempt to prove, and which he knew at the time they were made could not be proved. These statements were objected to by' the defendants’ counsel and they referred in the main to the equipment of the defendant corporation being old and obsolete; that the company undermanned its cars at the time and place of the accident, and failed to maintain proper guards to prevent a passenger thrown from a ear from going under its wheels. A few other and similar statements were likewise made by counsel. The practice indulged in by plaintiff’s counsel has frequently been condemned by the courts, and it is held that where it is clearly made to appear that prejudice has resulted from such improper statement, a new trial will be awarded. (Posell v. Herscovitz, 237 Mass. 513 [130 N. E. 69], and Baker Matthews Lumber Co. v. Lincoln Furniture Mfg. Co., 148 Va. 413 [139 S. E. 254].) The trial court instructed the jury that there was no evidence that the equipment of the company’s car was not of standard kind and character. It also upon denying the motion for new trial necessarily held that the remarks complained of resulted in no serious prejudice to the defendants. While we are not willing to place our stamp of approval upon such conduct, under all the circumstances before us, we are not prepared to say that the defendants were prejudiced by these remarks of counsel.

Respecting the misconduct of counsel occurring during the trial and while he was cross-examining witnesses, the defendants cite us to five separate occasions in which they claim that counsel transgressed the rules of propriety. On the first occasion, defendants objected to a line of questions asked one of the defendants’ witnesses by plaintiff’s counsel. The objection was sustained and no request was made that the court direct the jury to disregard the evidence and no such direction was given. On two occasions, the court struck out the evidence objected to and instructed the jury to disregard the same. The two other instances concern matters of such small importance that even if the remarks of counsel were improper they could not have had any material effect on the jury. The situation before us is much like that which confronted this court in-a former case in which it was said: “The trial court denied a motion for a new trial based upon the ground, among others, of misconduct of plaintiff’s attorney. In doing this the court must be deemed to have concluded that no prejudice was suffered by defendant by reason of any of the matters to which we have referred. Conceding some of the statements made by counsel, whatever the provocation thought by him to exist therefor, were improper, we are satisfied that this conclusion of the trial judge should not be disturbed by an appellate court. The trial judge is in a much better position than an appellate court to determine whether the verdict in a case is probably due wholly or in part to such alleged misconduct as we have here, and his conclusion in the matter should not be disturbed unless, under all the circumstances appearing it is plainly wrong. This we think may not fairly be said here.” (Lafargue v. United Railroads, 183 Cal. 720, 724 [192 Pac. 538].)

We are satisfied that none of the objections to the judgment raised by defendants is of such a serious character as to have materially prejudiced the defendants in the trial of the case and for that reason conclude that the judgment should be affirmed, and it is so ordered.

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

Rehearing denied. Edmonds, J., and Houser, J., voted for a rehearing.


author: WASTE, C. J.

text:
    [L. A. No. 15673.
    In Bank.

      August 4, 1938.]
    MARGARET M. MILLER, Respondent, v. ALFRED E. HART et al., Appellants.

      Byron J. Walters and R. L. Carlisle for Appellants.
    V. A. Morgan for Respondent.
    Louis Ferrari, Edmund Nelson, Freston & Files, Ralph E. Lewis, O’Melveny, Tuller & Myers, Walter K. Tuller, Louis W. Myers, Pierce Works and C. H. White, as Amici Curiae, on Behalf of Respondent.
   WASTE, C. J.

Pursuant to the allegations of the complaint herein, judgment was entered for the plaintiff decreeing foreclosure of a trust deed and sale of the property covered thereby, and the entry of a deficiency judgment in a sum equal to the difference between the amount of the indebtedness and the amount procured at the commissioner’s sale of the property. The defendants Hart appeal from that portion of the decree directing the entry of a deficiency judgment in such amount and contend that the trial court erred in denying their request for the appointment of an appraiser to determine the “fair value” of the property, pursuant to the provisions of section 726 of the Code of Civil Procedure, as amended in 1933, and in refusing to confine and limit any deficiency judgment thereafter to be entered, as provided in the cited code section as amended, to “the amount by which the amount of the indebtedness with interest' and costs of sale and of action exceeds the fair value of the property”, as determined under the section. The trust deed here involved and the note which it secures, were executed prior to said 1933 amendment of section 726, supra, and prior to the enactment in the same year (1933) of section 725a of the Code of Civil Procedure, which latter section, for the first time, provided for the judicial foreclosure of trust deeds.

In answer to a debtor’s contention that the remedy of judicial foreclosure provided by section 725a, supra, might not constitutionally be applied to trust deeds antedating its enactment, we had occasion to declare in Lincoln v. Superior Court, 2 Cal. (2d) 127, 130, 131 [39 Pac. (2d) 405, 406], that said section merely provided a new and alternative remedy looking to the application of the security to the indebtedness, in addition to the existing remedy of trustee’s sale under the instrument, which new remedy neither added to nor detracted from the substantive rights of the debtor but only required the payment of the indebtedness as contracted. Specifically, it was declared in the Lincoln ease that the right of foreclosure provided for in section 725a, supra, “is given as an alternative to the exercise of the power of sale under a trust deed. The section is a remedial statute which merely affords a new and additional means of enforcing a right. . . . In conclusion, we reiterate that because the beneficiary elects to accept all the incidents of judicial foreclosure when he pursues the alternate remedy provided by section 725a, supra, and because the trustor loses no substantive right, but, in fact, gains a statutory right of redemption, by the beneficiary’s election, the section is not unconstitutional as applied to trust deeds executed prior to its enactment.”

It is obvious from the foregoing that the pursuit of the new and alternative remedy of judicial foreclosure by a beneficiary under a trust deed which antedates the creation of such remedy, is one of choice and not of compulsion. The remedy of trustee’s sale contemplated by the trust instrument in the event of default, was not denied to or taken from the beneficiary who, following the enactment of the new and alternative remedy of judicial foreclosure, was still free, at his election, to make written declaration of default and demand for trustee’s sale. If, as stated, the pursuit of such new and alternative remedy of judicial foreclosure is optional with the beneficiary, we are of the view, regardless of the date of the trust deed, that he takes the right and pursues the remedy as it has existed from its inception, i. e., subject to the possible appointment of an appraiser and a determination of the 1 ‘ fair value” of the property, with any deficiency judgment thereafter entered being limited to the difference between the amount of the indebtedness and the “fair value” of the property. In other words, the beneficiary under a trust deed having an election of remedy, takes the new remedy of judicial foreclosure as he finds it with such limitations thereon as have existed since its creation and this even though his trust deed antedates the enactment of the statute granting such new remedy. Any detriment to or denial of the beneficiary’s substantive rights under the trust deed, assuming such detriment or denial flows from an application of the pertinent provisions of section 726, supra, which have been ineorporated ipto and made a part of such new remedy, is the result not ot legislative edict but of his own voluntary act in pursuing such remedy. We conclude, therefore, that the provisions of section 726 of the Code of Civil Procedure do not impair the obligation of contract and do not fall within the constitutional inhibition against such impairment in so far as they are made to apply to trust deeds antedating the amendment of such section by the voluntary pursuit of the alternative remedy of judicial foreclosure. Anything to the contrary in Wilson v. Superior Court, 8 Cal. App. (2d) 14 [47 Pac. (2d) 331], or other similar cases, is expressly disapproved.

It may not successfully be contended in opposition to the conclusion herein announced, that if the beneficiary, rather than electing to pursue the new and alternative remedy of judicial foreclosure, had caused sale to be made by the trustee under the power of sale and without decree of foreclosure, he would have been met by substantially identical provisions written into section 580a of the Code of Civil Procedure in 1933 and looking to the appointment of an appraiser and the fixation of the “fair value” of the security with a view to limiting any deficiency judgment after sale under the power, as in the case of the judicial foreclosure, to a sum equal to the difference between the amount of the indebtedness and the “fair value” of the security as so fixed. The problem presented by this attempted limitation on the existing remedy of sale under the power, in so far as it purports to apply to trust deeds executed prior thereto, is radically different from the problem presented by a similar limitation on the new and alternative remedy which the beneficiary may or may not elect to pursue. In the former case, the attempted limitation on the existing remedy of sale under the power in the trust deed, may not be given a retrospective application or operation for the reason that it would interfere with and detract from the substantive rights of the creditor. In Brown v. Ferdon, 5 Cal. (2d) 226' [54 Pac. (2d) 712], we dwelt at some length upon the impropriety of attempting to work a change in the substantive rights of creditors under the guise of a change in the remedy, declaring, in part, that “the existing remedy cannot be so altered as to take away or impair any of the rights given by the contract”. Prior to our decision in the last cited case, the reasoning therein expounded was given substantial expression and application by the District Court of Appeal in the case of Bennett v. Superior Court, 5 Cal. App. (2d) 13, 14 [42 Pac. (2d) 80], wherein it was held, in effect, that the provisions of section 580a, supra, looking to the appointment of an appraiser, the fixation of the “fair value” of the property and the limitation of any deficiency judgment after sale Toy trustee under the power contained in the instrument to the difference between the amount of the indebtedness and the “fair value” of the property so determined, could not be given a retrospective application for the reason that they constituted more than a mere procedural change in the existing remedy and, if applied retrospectively, would work a change in the substantive rights of the creditor under the guise of a change in the existing remedy. See, also, Central Bank of Oakland v. Proctor, 5 Cal. (2d) 237, 239 [54 Pac. (2d) 718], and Birkhofer v. Krumm, 27 Cal. App. (2d) 513 [81 Pac. (2d) 609], However, as stated above, this reasoning is without application to the new remedy as to which “the beneficiary elects to accept all the incidents of judicial foreclosure when he pursues the alternate remedy provided by section 725a . . . ”. (Lincoln v. Superior Court, supra.)

What we have said sufficiently disposes of the cause. While this matter was resubmitted at an earlier date in order to permit interested persons to file briefs amicus curiae as to any similarity or lack of it between this case and the recent case of Richmond Mtg. & L. Corp. v. Wachovia Bk. & Tr. Co., 300 U. S. 124 [57 Sup. Ct. 338, 81 L. Ed. 552, 108 A. L. R. 886], we are now of the view that even if the pertinent provisions of the statute here involved (sec. 726, supra), may be distinguished from those presented in the Wachovia case, a point we do not decide, such distinction becomes immaterial in the face of our conclusion that the pursuit of the new and alternative remedy of judicial foreclosure was not compulsory {Lincoln v. Superior Court, supra), and that the beneficiary was still free to pursue the existing remedy of sale under the power unfettered by the limitations and restrictions fastened upon the new and alternative remedy. (Bennett v. Superior Court, supra; Central Bank of Oakland v. Proctor, supra.) The Wachovia case would appear to be authority, however, for our conclusion that the legislature was free to attach such conditions as it desired to the new and alternative remedy of judicial foreclosure when, as has been held to be the fact, cases supra, the existing remedy of sale under the power continued as at the time of the execution of the trust deed, i. e., unchanged in so far as the substantive rights of the parties are concerned. In this connection the Wachovia case declares that “The legislature may modify, limit or alter the remedy for enforcement of a contract without impairing its obligation, but in so doing, it may not deny all remedy or so circumscribe the existing remedy with conditions and restrictions as seriously to impair the value of the right. The particular remedy existing at the date of the contract may be altogether abrogated if another equally effective for the enforcement of the obligation remains or is substituted for the one taken away.” Surely, if the existing remedy may be entirely abrogated provided another and equally effective remedy is provided, it follows, a fortiori, that a new and purely alternative remedy, not in existence when the trust deed was executed, may be limited or restricted in the discretion of the legislative body particularly when, as shown, the beneficiary was still free to pursue the old and existing remedy without loss of or detriment to his substantive rights. As above indicated, an election to pursue the new and alternative remedy committed the party to take that remedy “as he finds it”.

That portion of the judgment appealed from is reversed with directions to the trial court to proceed in conformity with the views herein expressed.

Shenk, J., Houser, J., Curtis, J., Langdon, J., and Edmonds, J., concurred.


author: SHENK, J.

text:
    [L. A. No. 16697.
    In Bank.
    August 5, 1938.]
    LOEW’S INCORPORATED, Petitioner, v. H. L. BYRAM, County Tax Collector, etc., Respondent.
    Loeb & Loeb and Herman F. Selvin for Petitioner.

      J. H. O’Connor, County Counsel, and Beach Vasey, Deputy County Counsel, for Respondent.
    Marshall Stimson, as Amicus Curiae, on Behalf of Respondent.
   SHENK, J.

This is a proceeding in mandamus to compel the respondent as tax collector of Los Angeles County to accept and receipt for the petitioner’s tender of general taxes on its property separately from the special assessments levied under the Acquisition and Improvement Act of 1925. (Stats. 1925, p. 849.)

The petitioner is the owner of numerous parcels of land in Culver City, Los Angeles County. Prior to 1931 improvements were constructed thereon the cost of which was provided for by the formation of improvement districts and the issuance of improvement bonds to be retired by special assessments levied in accordance with the provisions of said act. On December 4, 1937, the petitioner tendered to the respondent all taxes for the fiscal year 1937-1938 on certain parcels located in Culver City Acquisition and Improvement District No. 4, Zone D, except the special assessments thereon levied under said act. The respondent refused the tender, stating as the ground for his refusal that the payment of said special assessments could not be made separately from the payment of county taxes on said property, and that the duty of collecting said special assessments under said act together with and not separately from taxes for county purposes was enjoined upon him by law.

As originally enacted section 41 of the Acquisition and Improvement Act of 1925, so far as pertinent, provided as follows:

“Such special assessment taxes shall be~in addition'to all other taxes levied for state and county purposes, or for municipal purposes (as the case may be), and shall be levied, ¡ computed, entered, collected and enforced in the same manner j and by the same persons and at the same time with the same f penalties and interest as are other taxes for state and county / purposes, or for municipal purposes (as the case may be), and all laws applicable to the levy, collection and enforcement of taxes for state and county purposes or for municipal purposes (as the ease may be) are hereby made applicable to said special assessment taxes. ’ ’ J

The foregoing provision was amended in 1927 (Stats. 1927, p. 1376) so as to eliminate all reference to the method of levying, collection and enforcement of taxes for “state” purposes and all reference to laws applicable thereto. Otherwise the provision remained the same and was in effect when said District No. 4, Zone D, was organized and the bonds issued for the payment of which the assessments involved herein were levied. As so amended the statute remained the same until August 14, 1931, at which time another and a very significant amendment thereto became effective. By this amendment the foregoing provision as amended in 1927 was reenacted and the following paragraph was added: 11 Such special assessment taxes shall be collected and enforced together with, and not separately from, taxes for county purposes or for municipal purposes, as the ease may be.” (Stats. 1931, p. 1555.)

It is apparent that the amendment of 1931 is all-sufficient to require the collection of special assessments to pay for bonds issued under proceedings taken under said act after the effective date of the amendment “together with, and not separately from” taxes for county purposes, and no contention is made by either party to the contrary. It is contended by the petitioner and not seriously disputed that if the original statute did not require the collection of special assessments under said act “together with, and not separately from”, taxes for county purposes, the amendment of 1931 would not be applicable to special assessments levied under said act pursuant to proceedings, taken and bonds issued prior to the date of the amendment. This is so under the doctrine of County of San Diego v. Hammond, 6 Cal. (2d) 709 [59 Pac. (2d) 478, 105 A. L. R 1155]; Shouse v. Quinley, 3 Cal. (2d) 357 [45 Pac. (2d) 701]; County of Los Angeles v. Rockhold, 2 Cal. (2d) 192 [44 Pac. (2d) 340, 100 A. L. R. 149]; County of San Diego v. Childs, 217 Cal. 109 [17 Pac. (2d) 734]; Jeffreys v. Point Richmond Canal etc. Co., 202 Cal. 290 [260 Pac. 548]. But it is the contention of the respondent that the language of section 41 as originally adopted sufficiently authorized him to demand that the petitioner’s special assessments under said act be paid “together with, and not separately from” taxes for county purposes; that the amendment of 1931 added nothing to his authority and duty in that regard, but was adopted merely for the purpose of statutory clarification.

It is not difficult to conclude that clarification of the statute and a material change therein were both accomplished by the amendment. To determine whether the language of the original section was broad enough to justify the position of the respondent, we look to the law in other jurisdictions to ascertain the rights of the taxpayer under similar if not identical statutory provisions, for the reason that the question is of first impression in this state. Elsewhere it is established without conflict of authority that in the absence of clear statutory provision requiring payment of special assessments together with and not separately from taxes for county purposes the taxpayer has the right to pay separately. The cases in point are collected in an annotation found in 89 A. L. B. commencing at page 715 following the statement of the general rule as follows:

“The general rule is that where separate and independent taxes have been levied against the property of a taxpayer, he has the right to pay the full amount of any one tax without paying the others.” The cases annotated follow the text of the opinion in Milne v. Hess, 141 Or. 469 [18 Pac. (2d) 229, 89 A. L. R. 711], wherein it was held that a taxpayer’s right to pay one tax' levied against his property while refusing to pay other taxes thereon is not affected by statutes providing that all taxes levied by taxing agencies or districts shall be collected by the sa'me officer in the same manner and at the same time as county taxes, and fixing a date after which unpaid taxes shall become delinquent. (See, also, State v. Cole, 43 Wyo. 209 [299 Pac. 1040].)

Counsel for both parties seem to be of the impression that the case of Moore v. Gas Securities Co., 278 Fed. 111, is contrary to the general rule. A careful reading of the opinion discloses that such is not the case. There the statute made it the duty of the county treasurer of each county in Colorado in which any irrigation district was located to collect and receipt for all taxes levied as provided by law in the same manner and at the same time “and on the same receipt” as required in the receipt for the collection of taxes upon real estate for county purposes. The comments on that case in State v. Cole, supra, satisfactorily establish the fact that the Moore ease is in harmony with and not contrary to the general rule.

But it is insisted that the original section denied the right to pay separately and was fully as effective for that purpose as the amendment of 1931. There is a rule of statutory construction which leads to the contrary conclusion. That rule is stated and approved in People v. Weitzel, 201 Cal. 116 [255 Pac. 792, 52 A. L. R. 811], from which we quote: “In United States v. Bashaw, 50 Fed. 749 [1 C. C. A. 653], it was said: ‘The very fact that the prior act is amended demonstrates the intent to change the pre-existing law, and the presumption must be that it was intended to change the statute in all the particulars touching which we find a material change in the language of the act.’

“ ‘ Where changes have been introduced by amendment, it is not to be assumed that they were without design; usually an intent to change the law is inferred. ’ (In re Segregation of School Dist. No. 58, 34 Idaho, 222 [200 Pac. 138].) In Rieger v. Harrington, 102 Or. 603 [203 Pac. 576, 580], it was said: ‘By amending that statute, the legislature demonstrated an intent to change the preexisting law, and the presumption must be that it was intended to change the meaning of the statute in all the particulars wherein there is a material change in the language of the amended act.’ To the same effect are the following authorities: Springfield Grocer Co. v. Walton, 95 Mo. App. 526 [69 S. W. 477]; Duff v. Karr, 91 Mo. App. 16; Pierce v. County of Solano, 62 Cal. App. 465 [217 Pac, 545]; Shearer v. Flannery, 62 Cal. App. 91, 94 [22-8 Pah 549].”

The amendment of J1931 therefore effected a material change in the statute when it provided by specific language that the special assessment taxes should be collected "together with and not separately from the taxes for county purposes, and thus deprived the taxpayers of the right to pay separately— a right which he had prior to the amendment.

We conclude that the petitioner is possessed of the right asserted to pay its general taxes separately from the special assessment taxes levied under the Acquisition and Improvement Bond Act of 1925, and that the amendment of 1931, having been passed after the rights of the petitioner became fixed under the original statute, has not affected that right. Let the peremptory writ issue as prayed.

Waste, C. J., Seawell, J., Edmonds, J., Curtis, J., and Langdon, J., concurred.