author: WASTE, C. J. HOUSER, J., Dissenting.

text:
    [Sac. No. 5248.
    In Bank.
    April 21, 1939.]
    JULIA VALLADAO et al., Appellants, v. FIREMAN’S FUND INDEMNITY COMPANY (a Corporation), Respondent. MARY J. KATSULAKIS et al., Appellants, v. FIREMAN’S FUND INDEMNITY COMPANY (a Corporation), Respondent.

      Appelbaum & Mitchell, Mervin C. Lernhart, Lewis H. Cromwell and Lewis N. Mitchell for Appellants.
    Bronson, Bronson & McKinnon and John Painter for Respondent.
    Nourse, Betts & Jones, Myrick & Deering and Scott and Charles H. Goebels, Jesse H. Steinhart, John J. Goldberg, Brown & Rasson, Cooley, Crowley & Supple, Crosby & Crosby, Donahue, Richards & Hamlin, Hadsell, Sweet, Ingalls & Lamb, Neumiller & Ditz and Redman, Alexander & Bacon, as Amici Curiae, on Behalf of Respondent.
   WASTE, C. J.

The facts underlying this litigation are not in serious dispute and are practically conceded. It will facilitate matters, therefore, if we adopt, and' we do adopt, the following rather full statement of facts heretofore employed in an opinion of the District Court of Appeal of the Third Appellate District when the cause was there pending:

“These actions were jointly brought by the plaintiffs against the Fireman’s Fund Indemnity Company, a corporation, pursuant to the provisions of the statutes of 1919, chapter 367, being an action after judgments obtained by the plaintiffs against the assureds of the indemnity company had become final and executions returned unsatisfied.
“In November, 1935, plaintiff Julia Valladao and John C. Valladao recovered a judgment in the sum of $7,500 against Edwin J. Davis and Dave McClure, Jr., and on the same day plaintiffs Mary J. Katsulakis and John P. Katsulakis recovered a judgment against these same defendants in the sum of $1,000, which judgments were based upon personal injuries received by Julia Valladao and Mary Katsulakis in September, 1934.
“At the time of the accident there was in full force and effect a policy of insurance in the Fireman’s Fund Indemnity Company, insuring Dave McClure, Jr., against liability imposed by law upon him for bodily injuries. It also extended coverage to any person legally operating the automobile covered by the policy.
“The jury returned their verdict in the present action in favor of the plaintiffs, and thereafter, notwithstanding the verdict, the trial court entered judgment in favor of defendant Fireman's Fund Indemnity Company. Thereafter a motion for a new trial on behalf of the plaintiffs was denied. This appeal is from [the] . . . judgment.
‘‘ There is little dispute as to the facts, which substantially are that defendant indemnity company issued its combination automobile liability and property damage policy to Dave McClure, Jr., which was in full force and effect and covered the truck being driven at the time of the accident. An omnibus clause also covered ‘any other person or persons while . . . legally operating any such automobile ... if such . . . operation is with the permission of the named assured . . . ’.
“The accident happened on the highway north of Santa Rosa, about 10 o’clock on the night of September 24, 1934. McClure was driving his truck at the time, accompanied by one Bert Herbert and Edwin J. Davis. As McClure was proceeding along the highway he struck the rear of a car parked on the highway, in which car plaintiffs were seated. When the crash occurred McClure fled the scene of the accident without disclosing his identity to any one connected with the injured parties. [On two prior occasions McClure had pleaded guilty to and had been fined on reckless driving charges.]
“When a traffic officer arrived after the accident, McClure was still absent and Davis told the officer and those at the scene that he, Edwin J. Davis, was the driver. Davis had no operator’s license in his own name with him at the time, but had in his possession an operator’s license belonging to his brother, John K. Davis. He concealed the fact that McClure had been on the truck and stated to the officer that his name was John K. Davis, whose operator’s license he had. The officer then issued a citation for reckless driving in the name of John K. Davis and handed it to Edwin J. Davis. Davis accepted the citation, and in response thereto appeared in the justice’s court, and at that time, still posing as John K. Davis, pleaded not guilty to the charge of reckless driving. The first knowledge that the indemnity company had of the accident was received on the forenoon of the day after it occurred, when McClure and Edwin J. Davis reported the accident to defendant’s agent in Petaluma. At that time McClure and Edwin J. Davis appeared at the agent’s office, and in McClure’s presence Edwin J. Davis represented himself as John K. Davis, and told the agent that he was driving McClure’s truck at the time of the accident. In answer to questions by the agent, Davis narrated the accident as though he were the driver and told the agent he had borrowed McClure’s truck, and that McClure was not in the truck at the time, and that he and Herbert were the sole occupants of the truck, and that he had been arrested for reckless driving. Upon this statement of fact the agent prepared a written report and sent it to the indemnity company. A day or two following this report an adjuster for the defendant interviewed McClure and Edwin J. Davis, when they again confirmed the false statements made at the time of the first report. Some days after these reports were made McClure and Davis again went to the justice’s court, at which time Edwin J. Davis, answering to the name of John K. Davis, entered a plea of guilty to the charge of reckless driving under the name of John K. Davis, and paid a fine therefor.
‘‘ On November 17, 1934, plaintiffs herein, suing separately, filed actions against McClure and John K. Davis; McClure was sued as the owner and John K. Davis was sued as the operator of the truck. The summons in the case were sent by the defendants to the indemnity company.
“In December, 1934, the indemnity company turned these cases over to its attorneys in Santa Rosa for the purpose of defending McClure and Davis. Early in January, McClure and Davis discussed the facts of the case with these attorneys, and they there repeated substantially the same story they had theretofore told. On the same day, one of these attorneys, with Davis and McClure, visited the scene of the accident and went over the facts in the case, and the same falsifications and concealments were again narrated without correction.
“In due time answers to the complaints were prepared on behalf of McClure and John K. Davis, . . . and by them duly verified and then filed, [tho McClure denies having read same]. These answers affirmatively admitted that McClure’s truck was being driven by John K. Davis, but denied negligence upon the part of the operator, and set up contributory negligence as a defense. Again, a month or two later, McClure and Edwin J. Davis called at the office of the attorneys representing them for the purpose of discussing their depositions, which were to be taken by the plaintiffs. At that time they again discussed the facts in detail and again made the same misstatements.
“On . . . the day . . . the depositions of McClure and Davis were to be taken they, accompanied by their personal attorney, Mr. Carpenter, called upon Mr. Murp'hy, a member of the firm of attorneys who had been retained by the indemnity company to represent them, and then and there informed Mr. Murphy the stories which they had theretofore told were false,—that McClure was driving the truck at the time of the accident, and that Davis was merely a passenger in the truck, and not the driver. At that time McClure also informed Murphy for the first time that he had run away from the scene of the accident and had concealed himself. He said he had done so for the reason that he had been in trouble prior to that time arising out of a charge of driving while intoxicated, and that he was afraid his driver’s license would be revoked.
“Immediately following this disclosure Murphy communicated with the San Francisco office of the indemnity company, and then informed McClure and Davis that the indemnity company was withdrawing from their defense, and that Murphy himself and his firm were withdrawing as their attorneys. Murphy also immediately advised the attorney for plaintiffs that his firm was withdrawing as attorneys for McClure and Davis, and that no depositions could be taken at the time set. Later other attorneys were substituted as attorneys for McClure and Davis.
“An amended answer, setting up the true facts was filed, and it was stipulated at the trial that Davis’ name was ‘Edwin J.’ rather than ‘John K.’. At this trial, held November 10,1935, judgments were entered in favor of plaintiffs and against McClure and Davis.
“In March, 1936, the present action was filed. To this the indemnity company set up as an affirmative defense a breach by McClure and Davis of the cooperation clause in the policy of insurance. After a verdict for plaintiffs, the trial judge granted defendant’s motion for a judgment notwithstanding the verdict. . . .
“The cooperation clause contained in the policy issued by the indemnity company to McClure, and about which the issues here raised revolve, reads as follows:
“ ‘Co-operation of Assured:—E. The assured shall not voluntarily assume any liability, nor incur any expense, other than for immediate surgical relief, nor settle any claim, except at the assured’s own cost. The assured shall not interfere in any negotiation for settlement, nor in any legal proceeding, but whenever, requested by the Company, and at the Company’s expense, the assured shall aid in securing information and evidence and the attendance of witnesses, and shall cooperate with the Company (except in a pecuniary way) in all matters which the Company deems necessary in the defense of any suit or in the prosecution of any appeal.’ ”

Preliminary to a discussion of the issues here involved, it is well to point out that it is now definitely settled here, and in a majority of the states, that in an action of this character the injured person stands in no better position than the assured and that a violation by the latter of a cooperation clause which would serve to preclude the assured from indemnity under his policy will likewise bar the injured person from recovering against the insurer should the judgment in his favor and against the assured remain unsatisfied. (Hynding v. Home Acc. Ins. Co., 214 Cal. 743, 746-751 [7 Pac. (2d) 999, 85 A. L. R. 13].)

It may not be denied that aside from the obligation arising from the law of contract, a condition of a policy requiring the cooperation and assistance of the assured in opposing a claim or an action lodged against him by an injured person is material to the risk and of the utmost importance in a practical sense. Without such cooperation and assistance the insurer is severely handicapped and may in some instances be absolutely precluded from advancing any defense. Of course, as stated some years ago by Judge Cardozo, a cooperation clause may not be expanded to require the assured “to combine with the insurer to present a sham defense.” (Coleman v. New Amsterdam Cas. Co., 247 N. Y. 271 [160 N. Y. 367, 72 A. L. R. 1443].) At the same time, however, it cannot be contracted to exclude a fair statement of the facts. The insurer is entitled to know from its assured the true facts (of which he may have knowledge) underlying an accident and upon which the injured person bases his claim in order that it may determine for itself, in the light of such information, whether it should contest or attempt to settle the claim. Our examination of many authorities indicates the general rule to be that under a cooperation clause the assured is required to give a fair and frank disclosure of information reasonably demanded by the insurer to enable it to determine whether there is a genuine defense. (Coleman v. New Amsterdam Cas. Co., supra; Francis v. London G. & A. Co., 100 Vt. 425 [138 Atl. 780] ; Seltzer v. Indemnity Ins. Co., 252 N. Y. 330 [169 N. B. 403]; Finkle v. Western Auto. Ins. Co., 224 Mo. App. 285 [26 S. W. (2d) 843].) Many other decisions to the same effect might be cited. In Buffalo v. United States F. & G. Co., 84 Fed. (2d) 883, 885, it is stated: “The company is entitled, however, to an honest statement by the insured of the pertinent circumstances surrounding the accident, as he remembers them. Lacking that, the company is deprived of the opportunity to negotiate a settlement, or to defend upon the solid ground of fact. Nothing is more dangerous than a client who deliberately falsifies the facts.”

The subject receives the following treatment in Allegretto v. Oregon Auto. Ins. Co., 140 Or. 538 [13 Pac. (2d) 647, 648]: “We are convinced that the willfully false statement of Harris constituted a breach of the cooperation clause of the policy. It was his contractual obligation to make a full, fair and complete disclosure of the facts relative to the automobile accident in order to enable the insurance company to determine whether the claim should be contested. Cooperation, within the meaning of the policy, does not mean that the insured is to aid and assist the insurer in the maintenance of a sham defense. It does, however, imply good faith. The insured is not obliged to keep his mouth closed merely because an insurance-policy is involved. When he does speak, however, it must be to tell the truth. When the misrepresentation concerns a material matter and substantially affects the rights of the insurer, there is unquestionably a breach of the policy.”

It is generally established, and we shall not pause to refer to the authorities, that what constitutes cooperation (or the lack of it) on the part of the assured, within the meaning and effect of a cooperation clause, is ordinarily a question of fact. This is so because a dispute normally exists as to the actual statements and conduct of the assured in the premises or because of the existence of an uncertainty as to the intent or motive underlying his statements or conduct. But where, as here, the evidence addressed to the failure to cooperate is not materially in dispute and it is conceded on all sides that the assured, who was operating the truck at the time of the accident, repeatedly and wilfully misrepresented to the insurer over a period of five months the actual conditions prevailing at the time of the accident in the matter of the identity of the operator, we are of the opinion that the issue became one of law and that the trial court therefore correctly concluded as a matter of law that the assured’s conduct constituted a breach of the cooperation clause of the policy warranting judgment for the insurer notwithstanding the verdict. (Allegretto v. Oregon Auto. Ins. Co., supra; United States Fid. & G. Co. v. Wyer, 60 Fed. (2d) 856; Buffalo v. United States F. & G. Co., supra.) We are satisfied that under circumstances such as are here involved the problem is not the credibility of the evidence but rather the legal consequence thereof. The evidence narrated above warrants but one conclusion, viz., that the assured breached the cooperation clause of his policy by knowingly, wilfully and repeatedly misrepresenting the identity of the person driving the truck at the time of the accident—a fact unquestionably material to the insurer in its investigation and subsequent determination whether to settle or contest any claim arising out of such accident.

But, the appellants assert, this does not furnish a complete solution to the problem. They contend that even an intentional breach of a cooperation clause, such as we have here, does not serve to relieve and exempt the insurer from liability under its policy for an accident as to which there has been such breach, unless and until the insurer can establish that it was prejudiced thereby. In support thereof they urge that inasmuch as the so-called “omnibus clause” of the policy extended its coverage to any person operating the truck with the assured’s permission, it was immaterial to the risk whether the assured or Davis was driving at the time of the accident and that the repeated false statements of these two persons over a period of several months that Davis was driving with the permission of the assured (who was continually represented as not being present, when in fact the assured was both present and driving) in no way added to the burden of the insurer inasmuch as it was answerable for the conduct of either person while operating the truck. Particularly is there a lack of prejudice shown, it is asserted, because of the presence of certain preliminary reports to the insurer by its investigators that the matter had best be settled as “there is very little defense that we can offer in this case”.

Whether it is indispensable that an insurer make a showing of prejudice resulting from breach of a cooperation clause in order to relieve itself from liability for an accident, is a question upon which there is an absence of unanimity. The Coleman case, (N. Y.) supra, is to the effect that prejudice need not be shown. (See, also, Hunt v. Dollar, 224 Wis. 48 [271 N. W. 405].) There is however, respectable authority which requires the insurer to establish that the assured “failed to cooperate with it in such way as to prejudice it”. (Francis v. London G. & A. Co., supra.)

We do not find it necessary to here definitely determine whether the insurer must make such a showing of prejudice. While it is true that it was so indicated in Hynding v. Home Acc. Ins. Co., supra, upon which case the appellants strongly rely, we are satisfied upon a reading of the decision therein that the subject was there only briefly and incidentally discussed and was unnecessary to the disposition of that cause. The sole issue in that case was whether an insurer might set up as against the injured person the defense of breach of the cooperation clause by the assured. Upon this issue it was held that the weight of authority supported the conclusion that in this respect the injured person was in no better position than the assured and that it was therefore error for the trial court in that case to strike out the insurer’s defense based on breach of the cooperation clause. It was not indispensable that the subject of the presence or absence of prejudice resulting therefrom be discussed and, as already stated, it received only passing and incidental attention. Moreover, it was there indicated that prejudice sufficiently appeared.

In declining to now definitely determine whether the insurer must make a showing of prejudice resulting from breach of the cooperation clause by the assured, we do so for reasons similar to those announced in Purefoy v. Pacific Auto. Indem. Exch., 5 Cal. (2d) 81, 87 [53 Pac. (2d) 155] (which decision is later in point <of time than that in the Hynding case, supra, relied on by the appellants). We there disposed of the contention by declaring: “Appellant contends that in an action brought by the injured person against the insurance company, before it may rely on a breach of condition to avoid liability it must appear that it has been prejudiced by the breach. Respondent contends that our statement in Hynding v. Home Acc. Ins. Co., 214 Cal. 743 [7 Pac. (2d) 999, 85 A. L. R. 13], to the effect that the violation of the condition by the assured cannot be a valid defense against the injured party unless in the particular case it appears that the insurance company was substantially prejudiced thereby, was unnecessary to the decision, and should be disapproved of in the instant case, as it is contrary to the great weight of authority in other jurisdictions. (Coleman v. New Amsterdam Casualty Co., 247 N. Y. 271 [160 N. E. 367, 72 A. L. R. 1443, note p. 1446, see, particularly p. 1499]; Clements v. Preferred Acc. Ins. Co., 41 Fed. (2d) 470 [76 A. L. R. 17, note, p. 23, see, particularly p. 201] ; note, 85 A. L. R. 20, particularly p. 70; St. Louis Architectural Iron Co. v. New Amsterdam Casualty Co., 40 Fed. (2d) 344, certiorari denied, 282 U. S. 882 [51 Sup. Ct. 86, 75 L. Ed. 778; Jefferson Realty Co. v. Employers’ Liability Assur. Corp., 149 Ky. 741 [149 S. W. 1011].) Respondent contends that as liability insurance is not compulsory, but voluntary, effect must be given to express conditions between the parties to the contract of insurance, as in the case of other types of contracts, without a showing of prejudice.

“We are not disposed at this time to enter upon a further consideration of the conflicting decisions as to whether prejudice must be shown, for we are of the view in the instant case, as we were in the Hynding case, supra, that prejudice sufficiently appeared, ...”

The decision in the Purefoy case then proceeds to point out that prejudice must be presumed from the failure of the assured therein to notify the insurer of the accident for a period of a year and three months (though it learned of the accident from the injured person three and one-half months thereafter) because such conduct precluded prompt investigation of the accident. It was also stated to be immaterial that the assured after giving such belated notice offered to cooperate and that counsel for the injured person gave the insurer full opportunity to defend, of which it did not avail itself. The insurer was said to be “entitled to rely on a substantial breach of so material a condition of its policy. ’ ’

So it is in the present case. We are satisfied from an examination of the record that as matter of law prejudice must be presumed (if prejudice be essential to the insurer’s defense) from the substantial and' wilful breach by the assured of the material cooperation clause of the policy. The matter is aptly summed up in a memorandum opinion filed by the trial court at the time of entering judgment for the respondent insurer notwithstanding the verdict for the appellants. The trial judge stated, in part: “The misrepresentations were not mere matters of opinion nor of a nature which could be excused upon the ground of forgetfulness, mistake, or the like. They were wilful, deliberate and false and made with the intention on the part of Davis and McClure to deceive in order to serve their own purposes. They concerned essential facts in relation to the operation and handling of the car at the time of the collision, the parties present and surrounding circumstances as to which the insurer was under its contract, entitled to a full, fair and complete disclosure. A co-operation clause binds the insured to the exercise of good faith and when he speaks concerning the facts of the accident it must be to tell the truth. To wilfully misstate or conceal facts in such a case is clearly not co-operation or assistance; it is exactly the opposite. Was it, then prejudicial 1 I see no escape from the conclusion that under all the circumstances here prejudice naturally, inherently and necessarily existed. The insurance company had taken a formal position as to the facts from which it could not recede without great disadvantage. The answer bearing all the forms of verification was on file. The false statements had been made to the traffic officer, the investigator and others. A false plea had been entered before the justice and a false writing subscribed as a report. When the true facts were disclosed, the company had to exactly reverse its position with regard to essential facts and virtually proclaim their parties and chief witnesses to be liars and wholly unworthy of belief. Practically its only props were struck from under it. Better a great deal that there had been an absolute refusal to tell the facts at all than that it should have been deceived into taking a false position and then suffering the disadvantage and detriment of confessing it, thereby utterly destroying the credibility of the principal witnesses to the facts upon which it relied in defense. I am of the opinion that damage and prejudice inheres in and must be presumed to exist in such a ease. Hence it is a matter of law and not of fact; a problem for the court and not for the jury.”

The fact that the insurer was for several months kept in ignorance that its assured (previously twice convicted of reckless driving) was the operator of the truck undoubtedly misled the insurer in its investigation of the accident and may well have deterred it from seeking to settle the appellants’ claims, which it may well be presumed it would have attempted to settle if fully and truthfully apprised of all the facts, including the fact that its assured was a “hit and run” driver, a matter that undoubtedly would weigh heavily with a jury and would suggest settlement. The decision in the Purefoy case, supra, is to the effect that prejudice may be presumed from a failure to cooperate which interferes with and precludes a proper and prompt investigation of the accident.

Moreover, had the insurer proceeded to defend on behalf of its assured, it faced the spectre of having its principal witnesses denounced in open court as perjurers in view of the “about-face” in their stories, reflected in the original actions by two verified but inconsistent and contradictory answers to the complaints of the respective injured persons. The insurer before withdrawing from the defense of the actions was not required at its peril to anticipate that no reference would be made upon the trials thereof to the falsity of the prior assertions of the two principal defense witnesses. At the time the insurer withdrew because of the assured’s breach of the cooperation clause, it was warranted in reasoning that the trials would serve to expose its witnesses as perjurers. The reasonableness of such an assumption now stands demonstrated by the record in this case wherein are included portions of the testimony adduced upon the trials of the original actions for damages from which testimony it appears that the principal defense witnesses McClure (the assured) and Davis there testified that the assured was actually operating the truck whereas the testimony of the police officer (who came upon the scene of the accident) disclosed that Davis then and there stated to the witness that he (Davis) was operating the truck when the collision occurred. The answers also reflected such inconsistency in the story of the assured and Davis.

The facts involved in the Oregon case of Allegretto v. Oregon Auto. Ins. Co., cited above, are quite similar to those of the present case. In that case, as here, the assured falsely represented that another was driving the automobile at the time of the accident. On such statement an answer was prepared and filed. Shortly prior to the trial the true facts were learned and the answer was accordingly amended. The insurer then disclaimed liability but conducted the defense (unsuccessfully) under a reservation of its right. In the subsequent action against the insurer, both sides moved for a directed verdict. The motion of the plaintiff (injured person) was granted and the insurer appealed. The judgment was reversed. Following the statement, quoted at length above, that it is the contractual obligation of the assured to make a true and complete statement of the facts, it was held, in effect, that the motion of the insurer should have been granted upon the ground that the assured’s misrepresentation of a material fact constituted a prejudicial breach of the cooperation clause'as a matter of law. In so concluding, the opinion therein states “can it reasonably be said that the insurance company’s rights were not substantially prejudiced when it was obliged to file an amended pleading which had the effect of apprizing the jury of the fact that Harris has not told the truth in the first instance? . . . The insurance company was the victim of the fraud and deception of one who had agreed to ‘render to the company all cooperation and assistance within his power except in a pecuniary way.’ ” This conclusion was announced even though “so far as the liability of the insurance company is concerned, it was immaterial, under the terms of the policy, whether Harris or Akre was driving the ear ...” In other words, the insurer is entitled to a truthful statement of the circumstances of an accident from its assured even though under a so-called “omnibus clause” it would equally be liable for the negligence of another, if such other actually operated the automobile at the time of the accident and had not been wilfully misrepresented by the assured as being the operator at such time. As we have already indicated, the identity of the driver might well constitute a material factor in the insurer’s consideration and determination of the problem of settling or opposing the injured person’s claim. Nor do we think that preliminary reports of the insurer’s investigators tending to indicate a possible lack of defense on the merits to an injured person’s claim, precludes the insurer from availing itself of a defense based on a substantial breach of the cooperation clause. We are not now in a position to conjecture as to what settlement or defense on the merits the insurer may have worked out had it been originally fully and truthfully advised by the assured and had it not been forced to withdraw because of its assured’s false statements. The notice of withdrawal was timely and adequate in scope.

In conclusion, we note the appellants’ contention that nowhere in the policy is there a forfeiture clause and that inasmuch as forfeitures are not favored either in law or equity none should be here enforced. The ease of Finlde v. Western Auto. Ins. Co., supra, at page 846, suggests an answer to the contention. It there appears: “Nor is there any doubt about the contention of counsel for plaintiff that courts abhor forfeitures, and refuse to read such a drastic provision into a policy of insurance when the parties themselves have not unmistakably inserted it therein. In such an instance as this, however, we do not understand that any forfeiture of the policy is involved. If the insurer is fortunate enough to escape liability, it is not necessarily by a forfeiture of the policy, for the policy may well remain in full force and effect as to those losses sustained by the assured where the conditions of the policy have been met, while a recovery may be defeated as to a particular loss in connection with which the assured was remiss in the performance of his obligations under the contract.

“By this we mean that the condition of the policy requiring cooperation by the assured is in the nature of a condition precedent to liability on the company’s part for the loss growing out of a claim with the disposition of which the assured’s assistance is demanded; and we see no reason why we should hold that a breach of such condition in a given instance should have the effect of nullifying and vitiating the contract for all time and purposes. In other words, the failure of the assured to aid in securing information and evidence when requested by the company will not terminate the company’s entire liability as a matter of law, the policy not expressly making such failure a cause of forfeiture, but, in an action by the assured for indemnity to cover a particular loss sustained, his failure will be evidence for the company on the vital question of whether he was guilty of such a breach of his contract as to serve to defeat his action, and to relieve the company from liability therein. ’ ’

Applying this reasoning to the case now before us we find that the insurer in its written notice of withdrawal to the assured merely expressed its “refusal to protect [the assured] under their above numbered policy for claims arising out of the accident referred to in the said actions.” The answer filed in each of these actions by the insurer in response to the complaint of the respective appellants alleged that in so far as the assured was concerned “no insurance coverage existed ... in respect to any of the matters alleged in said complaint.” It is obvious from the foregoing that the insurer was merely disclaiming liability for the accidents to the appellants and was not declaring a forfeiture of the-policy. The reasoning of the case last quoted from is therefore applicable. (However, even if the insurer were seeking a forfeiture of the policy generally, so long as it is entitled to avoid liability for this particular accident, it is questionable whether the appellants would be in a position to object thereto.)

The Purefoy case, supra, 91, reaches a similar conclusion in the following manner: ‘ The policy of liability insurance did not insure Austin only against liability on account of this particular accident, but also against liability for other accidents during the life of the policy, which was one year from December 15, 1929. We are of the view that by retaining the premium the insurer may have waived the right to declare the policy forfeited, and thereby have protected Austin as to other accidents during the life of the policy, but that it did not waive the right to rely on the breach of condition to defeat liability as to this particular accident.”

The record and many briefs herein, including the several amici curiae briefs, have been examined and we are of the view that sufficient has been said on the many arguments expounded by counsel. It is impossible to here refer to and discuss the many cases cited in the several briefs.

The judgment is affirmed.

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

HOUSER, J., Dissenting.

I dissent. Notwithstanding the possible trend -of precedents to the contrary, I am unwilling to subscribe to a doctrine which either will, or may, encourage the perpetration of fraud, or afford a favorable opportunity to unscrupulous insurance companies (if any) or to their agents, through collusion with an assured, to defeat the just rights of one who may be injured through the negligence of an insured person. It is obvious that, under the rule that has been announced in the majority opinion, as a consequence of a possible collusion between an insurance company and an impecunious owner of an automobile, an insured person might be induced to “cooperate” with an insurance company even up to any moment of a trial, and then, under some pretext, or for no reason whatsoever, either fail or decline to continue in his “cooperation”,—with the result that, however meritorious the cause of action of a plaintiff might be, the insurance company would become absolved from liability, to the irreparable loss of the injured person.

I am of the opinion that, by virtue of the exercise of police power, not only is the public entitled to assert and to maintain an interest in every automobile insurance policy, but also that, by its contract, an insurance company impliedly holds out to the world an assurance that it will answer for the actionable negligence of the insured person. Likewise, and in consequence, am I convinced that until and including the instant when an accident insured against may occur, the contract of insurance should be interpreted as one made not only for the benefit of the person with whom such contract has been entered into, but also for the benefit and protection of the third person who may be injured in such accident; furthermore, that to permit an insurance company, because of its agreement with its assured to that legal effect, to evade liability that already may have ensued against it, solely for the reason that thereafter the assured has failed to “cooperate”, amounts to nothing less than legal encouragement and an implied invitation to commit a fraud as far as the rights of the injured person are concerned. Such an agreement should be condemned as contrary to public policy and adjudged wholly void. In other word's, my conclusion is that, after an accident has occurred, by no act, omission, or agreement of any kind, by or in behalf of the parties to the contract, should the assumed rights of interested third persons therein be adversely affected. The following authorities have at least an indirect bearing upon the situation herein presented:

In the case entitled Stovall v. New York Indemnity Co., 157 Tenn. 301 [8 S. W. (2d) 473, 72 A. L. R. 1368], the court said: “ ... in Blashfield’s Cyclopedia of Automobile Law, (1927) vol. 3, p. 2637, the case of Dickinson v. Maryland Casualty Co. [101 Conn. 369 (125 Atl. 866, 41 A. L. R. 500)], supra, is referred to as holding that ‘where an automobile liability insurance policy extended indemnity to third parties driving with assured’s permission, and permitted suit against the insurer by persons injured by the operation of the car, slight deviations, by one permitted by the insured to drive home to change his clothes, from the route to the home of the driver, does not destroy the insurer’s liability for injuries to a guest of the driver’.”

Referring to the Dickinson ease, the court proceeded to say: “ In construing the policy, we think the Supreme Court of Errors of Connecticut correctly placed emphasis upon the purpose of the named insured to protect any person injured by the operation of the car by giving him a cause of action against the insurer, in the event of the insolvency or bankruptcy of the person responsible in law for injuries inflicted in the operation of the car. This object or purpose is in accord with the trend of public opinion, tohich, in some juris dictions, has resulted in legislation requiring owners and operators of automobiles to carry insurance for the protection of persons who may be injured by their operation.” (Emphasis added.)

That the rights of any person lawfully using the highway who may he injured by the negligent operation of an automobile by another should be of paramount importance, in an action brought by such injured third person to collect damages resulting from his injuries, is borne out by the fact (commented upon in the case just cited) that in several jurisdictions the legislatures of the respective states have enacted compulsory automobile insurance laws. Such laws have been held' to be valid legislative enactments, under the police power of the state. (See Huddy, Cyclopedia of Automobile Law, ninth edition, vol. 13-14, p. 302, and cases there cited.)

Thus in the work of Couch, Cyclopedia of Insurance Law, vol. 5, p. 4199, in discussing the compulsory automobile insurance law of New Hampshire, the author says: “ . . . the New Hampshire court, in passing upon the questions submitted to it, declared that the legislature, under its authority over public highways and its power to provide for the public safety, could lawfully pass a general requirement that motor vehicles may be operated on the public highways only when adequate provision has been made for compensation to persons injured by negligent operation; ...” (Emphasis added.)

And in the case entitled Wheeler v. O’Connell, (Mass.) 9 N. E. (2d) 544, the court said: “The purpose of the compulsory motor vehicle insurance law ... is to provide compensation to persons injured through the operation of the oMtomobile insured by the owner. In speaking of the grounds for justification of the statute in question, it was said in Opinion of the Justices, 251 Mass. 569, 596 [147 N. E. 681, 694]: ‘The most important is the great uncompensated damage now caused by motor vehicles to innocent travelers upon the public ways. ’ And it has been pointed out by this court in many eases that the protection of the traveler on the public ways is the fundamental basis of the statute. [Citing cases.]” (Emphasis added.)

Also in the case entitled In re Opinion of the Justices, 251 Mass. 569 (147 N. E. 681, at pp. 693, 694), the court discussed at length the reasons underlying legislation providing for compulsory automobile insurance, and commented as follows:

“The power of the General Court to regulate travel over the public ways of the commonwealth for the general welfare is extensive. It may be exercised in any reasonable manner to conserve the safety of travelers. No one has a right to use streets and other public places as he chooses without regard to the presence of others. It is an underlying conception of streets and highways that they shall at all times be reasonably safe and convenient for public travel and that travelers thereon in the exercise of due care may be secure from preventable danger. Numerous statutes to that end have been enacted from early times to the present. All highways now are laid out and established by public authority. . . . The requirement that every owner before being allowed to register his motor vehicle shall provide security for the discharge of his liability for personal injuries or death resulting from the presence of such motor vehicle on the public ways cannot be pronounced unreasonable. It furnishes a degree of assurance of compensation to those rightly and carefully using the ways and injured by the carelessness of operators of motor vehicles. It may be thought that an indirect result of such regulation will be to cause the exercise of greater care on the part of such operators and of higher caution on the part of owners of motor vehicles in refusing to intrust them to careless operators. The requirement for security for the payment of the legal claims arising from personal injuries caused on highways by motor vehicles is an extension of the police power into a new field so far as we are aware, but in our opinion it falls within the limits of the constitutional power of the General Court. It may be justified on several grounds. The most important is the great uncompensated damage now caused by motor vehicles to innocent travelers upon the public ways. It is a part of the declaration of Rights of our Constitution that:
‘Every subject of the commonwealth ought to find a certain remedy, by having recourse to the laws, for all injuries or wrongs which he may receive in his person, property, or character.’ Article 11.
“Another ground upon which the validity of the proposed statute may rest is that the motor vehicle is of itself a dangerous instrumentality. Unless kept in good repair and equipped with adequate brakes and then driven on public ways with a high degree of care and skill, it is bound to become a source of imminent danger to other travelers. Chief Justice Shaw said in Commonwealth v. Alger, 7 Cush. 53, 84, 85:
“ ‘It is a settled principle, growing out of the nature of well-ordered civil society, that every holder of property, however absolute and unqualified may be his title, holds it under the implied liability that his use of it may be so regulated that it shall not be injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the rights of the community. ’
“ ... It has commonly been thought that there is no more certain way of securing attention to the safety of human beings than by holding those responsible for dangers to heavy and certain liability for injuries arising therefrom. [Arizona Employers’ Liability Cases], 250 U. S. 400, at 432 [39 Sup. Ct. 553, 63 L. Ed. 1058, 6 A. L. R 1537]. Legal liability without financial responsibility is a barren right to one who sustains injury by the wrongful act of another. A peremptory requirement that, before one brings a dangerous instrumentality into public places, the owner must first provide adequate security that those who suffer personal injury through the negligent use thereof shall be assured of recompense would be no greater interference with fundamental rights than the instances just cited. The operation of such an instrumentality in public places is not a natural right. It is subject to reasonable regulation for the benefit of the general public. ...” To the same effect is Re Opinion of the Justices, 81 N. H. 566 [129 Atl. 117, 39 A. L. R. 1023].

In the face of the provisions of the several statutes to which reference has been had in the foregoing quotations, the reasoning employed by the different appellate tribunals in the cited eases, and the judicial pronouncements in connection therewith, it would seem most improbable that, by reason of a contract provision like the one here in question which might be contained within a policy of insurance,—on the happening of an accident which had occurred through and by reason of the negligent act of the assured—an insurance company would be allowed to evade liability therefor on the ground that, after the accident had occurred, the assured had either refused or failed to “cooperate”.

Furthermore, as tending tbward a recognition and consequent application of a doctrine such as that which herein-before has been suggested and which to my mind should prevail herein, see the case of Malmgren v. Southwestern A. Ins. Co., 201 Cal. 29 [255 Pac. 512].

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


source: Caselaw Access Project

author: THE COURT.

license: Public Domain

text:
    [Sac. No. 5223.
    In Bank.
    April 26, 1939.]
    R. STEVENS et al., Respondents, v. OAKDALE IRRIGATION DISTRICT (a Public Corporation), Appellant.

      Griffin & Boone for Appellant.
    Gumpert & Mazzera and J. Calvert Snyder for Respondents.
   THE COURT.

The sole question for decision is that of the right of plaintiffs, appropriators of foreign waters, to restrain the producer of the foreign flow (defendant irrigation district) from increasing its beneficial use of such waters by-recapturing them within its boundaries, thus cutting off their escape and drainage in accustomed manner down a natural stream channel to plaintiffs’ land and point of diversion.

The trial court entered judgment decreeing that as against defendant, plaintiffs have the right to two cubic feet of water per second continuous flow in the creek over their land, perpetually enjoining any interference by defendant with this right, and awarding plaintiffs damages in the sum of $3,000, together with costs. Defendant has appealed.

Concerning the essential facts there is little dispute. The Stanislaus River, a typical western stream having its source in the high snows of the Sierra Nevada Mountains, flows in a general westerly direction across the San Joaquin Valley, and empties into the San Joaquin River. Lone Tree Creek is also a tributary of the San Joaquin River, but it flows from the low foothills of the Sierra Nevada range, and under natural conditions is fed solely by rain water from them, and not by the snows; therefore, it carries water only in the season of heavy rains, about October to May, and is dry during the remainder of the year. The watershed and drainage area of the Stanislaus River is entirely different from that of the Lone Tree Creek, and the meandering courses of the two streams are some five to fifteen miles distant one from the other.

The land of plaintiffs is located in an arid portion of the San Joaquin Valley, riparian to Lone Tree Creek, and for many years plaintiffs and their predecessors have utilized the waters of the creek for irrigation. Some seven miles upstream from this land of plaintiffs, the creek traverses the property of defendant irrigation district. Defendant district was organized in the year 1909. It covers an area of approximately 70,000 acres, which territory is susceptible of irrigation by waters diverted from the Stanislaus River. About the year 1912 defendant commenced to conduct water from the river through its irrigation ditches and laterals, and the portions of this flow which reached points without the watershed of the river but within the watershed of the Lone Tree Creek, were permitted to enter the creek bed as seepage, waste, and spill, and to drain down to plaintiffs’ premises. The result was that after the year 1912 there was a continuous flow of water past plaintiffs’ land in augmentation of the intermittent natural flow of the stream. In 1927, at a cost of over $1,000,000, defendant constructed the Melones reservoir on the Stanislaus River, for the purpose of procuring storage water with which to continue irrigation after exhaustion of the normal flow of the river in the middle of summer. The use of this reservoir increased the amount of water available to defendant during the late summer for irrigation of its lands in the vicinity of Lone Tree Greek, and consequently created a corresponding increase and regularity of flow in the creek channel at plaintiffs’ point of diversion. Subsequent to the year 1926, so the trial court found, this flow exceeded two cubic feet per second of water the year round. In 1927, plaintiffs filed notice of appropriation, followed by an application to the state division of water rights, and on July 15, 1929, received a permit to appropriate, from April first to November thirtieth of each year, two cubic feet per second continuous flow over and across their land of waters of the creek. They thereupon commenced the construction of an adequate diverting system, including dam, laterals, ditches, and canals. In all, during the next few years, they expended in excess of $7,000. The trial court found that defendant had knowledge of this construction work.

In the spring of 1934, defendant, for the first time, manifested an intention to recapture the waste, spill, and seepage water from the creek, and to reapply it to beneficial uses. At a point within its own boundaries, and above the land of plaintiffs, it built a dam and commenced to pump from the creek, thus depriving plaintiffs of the flow from which they had been irrigating an average of 100' acres each year. In the fall of 1934, defendant removed the dam, in its place dug a large sump in the course of the creek, and established a pumping plant therein. As a result of this activity plaintiffs were deprived of water during the irrigating seasons of the years 1934, 1935, and 1936, and were unable to raise and mature crops on their land, to their damage in the sum of $3,000.

The present action was commenced in July, 1934, but by supplemental pleadings the issues were enlarged to embrace defendant’s activities up to the fall of 1936. Plaintiffs’ final prayer was for the recovery of damages sustained up to that time, and for an injunction restraining defendant from maintaining the sump and pumping plant, and compelling it to permit the water to drain down the stream channel in accustomed manner. By its pleadings defendant asked for a declaration of its ownership and right to use all of the waters flowing into the creek as a result of its operations.

No issue whatsoever was raised concerning the respective rights of the parties in and to the natural flow of the creek. The sole subject of controversy was the status of the foreign waters brought into the creek watershed by defendant. Furthermore, plaintiffs attempted to limit even this issue, in that they did not claim a right to compel defendant to continue importation of the foreign flow, but merely asserted that they were entitled to enjoin defendant from recapturing it after it had once drained into the channel of the creek.

Upon trial of the cause the court found, in addition to the facts which have already been related, that from 1912 to the spring of 1934 plaintiffs and their immediate predecessors made complete beneficial use, to and including the amount of two cubic second feet, of all seepage, waste, and spill water flowing in the creek during the irrigation seasons of each year, and that such use was open, notorious, continuous, uninterrupted, under claim of right, and hostile and adverse to the rights of any other person in and to use of the water during said periods. Further the court found it to be true that the “defendant abandoned its rights to the water it allowed and/or allows to get into Lone Tree Creek as seepage, waste and spill”, and that plaintiffs acquired a right to two second feet continuous flow prior to the time that defendant manifested any intention of attempting to recapture the waste, spill, and seepage water from the creek. Upon these premises the court rested its conclusion and judgment that plaintiffs, as against defendant, have the right to take all of the water flowing in the creek to the extent of two cubic second feet continuous flow over their land, and that defendant is perpetually enjoined from in any manner interfering therewith.

Defendant seeks a reversal of the judgment, contending that the real purport of the adjudication is to impress upon it a duty to continue to conduct from the Stanislaus Biver, and pass through its irrigation system, a constantly sufficient quantity of water to produce a flow in Lone Tree Creek equal to plaintiffs’ requirement. Apart from the question of the scope of the judgment, this contention touches the principal point of dispute on this appeal, to wit: What is the extent of . the right which a down-stream proprietor, by appropriation and use of abandoned foreign water, may acquire against the producer of the flow?

It is plaintiffs’ theory that, regardless of whether a lower claimant may compel continuance of importation of a foreign water supply, once such water has actually been conducted into the foreign watershed and drained into a natural watercourse therein, the further interception or recapture of the flow by the producer may constitute an invasion of a right thereto acquired by the lower claimant—and this despite the fact that the retaking occurs before the water leaves the control of the producer or passes the boundaries of his land. Defendant, on the other hand, vigorously asserts that the lower appropriator of the foreign supply is not only without right to enforce continued importation of the water into the second watershed, but he is also without right to compel the producer to continue abandoning any particular portion of the flow. The status of the imported water is not changed, according to defendant, by the mere fact that the producer, upon his own property within the second watershed, uses the channel of a natural watercourse as a temporary conduit or drain, retaking the water therefrom for further beneficial application within his boundaries.

It is the general rule, probably subject to exceptions not here involved, that the producer of an artificial flow is for the most part under no obligation to lower claimants to continue to maintain it. At any time he may' forsake the practice, and lower users will not have acquired a right against him, either by appropriation or prescription, to continued augmentation of the natural volume of the stream. (E. C. Horst Co. v. New Blue Point Min. Co., 177 Cal. 631 [171 Pac. 417] ; Hagerman Irr. Co. v. East Grand Plains Drainage Dist., 25 N. M. 649 [187 Pac. 55] ; Wiel, Mingling of Waters, 29 Harvard Law Review, 137; 25 Cal. Law Review, 124.) While rights may be acquired by lower proprietors in and to such portions of the foreign flow as have been abandoned by the producer and thus made available for other use, these rights are always subject to the contingency that the supply may be intermittent or may be terminated entirely at the will of the producer. In other words, although the fact that the producer may discontinue the foreign supply does not preclude others from acquiring a right to it. when and if it exists, such fact does affect the value of the right so acquired, in that its permanency is not assured. (Crane v. Stevinson, 5 Cal. (2d) 387, at page 394 [54 Pac. (2d) 1100].) Mr. Wiel, discussing in the article on Mingling of Waters, supra, the restricted point of the effect of the negative act of the producer of a foreign flow in failing to keep up the addition to the second stream states:

“He (one who conducts water from First River into the watershed and stream channel of Second River) . . . has the ownership of the right to the flow of First River to the intake of his conduit, and, it may be, the ownership of such specific water as is actually passing through his works, but the water that has left the mill and has gone down Second River is again neither his property nor anyone’s. It is however, affected by the important consideration that its continued going is not of natural but is of artificial cause; it is not a natural body of water, nor a natural formation; its existence as a whole depends upon the action of this man. It is from this consideration, and not from ownership of any water as such, that a question first arises between him and lower claimants upon Second River. As a result he is, for the most part, under no obligation to them to continue to maintain the flow. At any time or in any manner he pleases he may act upon the water at a point above where it leaves his control, although the result is to stop the flow into Second River. He may be in the situation in this respect of having a right as to lower parties to'have the water drain down Second River, without right in them to have him continue exercising his right, just as a right-of-way over another’s land is no evidence that the party entitled thereto is under duty to walk. . . . Maintaining for years a pump which leaked water onto a neighbor’s land, creates no duty that the pump must go on leaking. The millowner may cease to operate his conduit across the divide, or may cease to operate his mill, or his water wheels, or may change his location, or otherwise take away or alter, in whatever way he pleases, the artificial source of the flow into Second River. This principle is well settled in the decisions.”

It follows that plaintiffs in this action cannot predicate their claims upon any acquired right to compel defendant district to continue the importation of water from the Stanislaus River into Lone Tree Creek.

The problem then is to determine whether plaintiffs have acquired any lesser right against defendant which entitles them to the relief accorded by the trial court herein, such as a right to compel defendant, if and when it has imported the water, to maintain its past practice of abandoning in the channel of the creek within its boundaries, a sufficient supply to fill plaintiffs’ requirements. Stating the question another way, where the producer of an artificial flow does not decrease it at the source, but after importing it, acts upon it a second time while it is still within his land and before it leaves his control, does the doctrine above set forth apply, or may lower proprietors assert a right to enjoin any decrease in the volume of abandoned water ?

In finding the solution of this problem, the distinction must be observed between abandonment by one who creates an artificial flow, of his water right (the right to divert and use the water of the first stream), and abandonment of used water itself (the very body or corpus thereof), after it has been imported into the second watershed. (See Kinney on Irrigation and Water Eights, 2d ed., vol. 2, p. 2005, sec. 113 et seq.)

Waters brought in from a different watershed and reduced to possession are private property during the period of possession. When possession of ■ the actual water, or corpus, has been relinquished, or lost by discharge without intent to recapture, property in it ceases. This is not the abandonment of a water right, but merely an abandonment of specific portions of water, i. e., the very particles which are discharged or have escaped from control. (E. C. Horst Co. v. New Blue Point Min. Co., supra; Rock Creek Ditch, etc., v. Miller, 93 Mont. 248 [17 Pac. (2d) 1074, 89 A. L. E. 200, 204].) So in the present case, for example, there has been no abandonment by defendant of a water right, but only an abandonment of those portions of the imported water which have actually been permitted to drain down to plaintiffs’ land. As to this specific flow, discharged without intent to recapture, the abandonment has been complete, and plaintiffs have properly exercised a right to take the waters at their point of diversion. Defendant, having no further interest in the discharge, could not have stopped them so doing. But this past abandonment by' defendant of tain water, as distinguished from a water right, has not c ferred upon plaintiffs any right to compel a like abandi ment in the future, or to control defendant’s use upon . own land of such water as it imports. The principle i% clearly stated in Dannenbrink v. Burger, 23 Cal. App. 587, 596, 597 [138 Pac. 751], where in part it is said: “The lower claimant who received and put to use this water would only have a right to use it, for any purpose to which it was applicable, so long as it continued there. Time would raise no presumption of a grant nor found any claim to a continuance of the discharge. ... In other words, the appropriator merely secures the corpus of the water thus escaping as personalty, but does not thereby secure or acquire the right to the continuous flow of such water. ’ ’

While at first blush the above doctrine might seem a harsh one in its present application because plaintiffs here have expended a considerable sum for the construction of diversion works in the mistaken expectation that the foreign flow past their property would be permanent, upon mature consideration the injustice which would result if the rule were to the contrary is plainly to be seen. Defendant irrigation district has expended vast sums for the erection of the storage and diversion facilities which make possible the bringing of a continuous flow from the Stanislaus River to the Lone Tree Creek watershed. The development of any irrigation district must necessarily be a gradual one. A perfection of the system to the point where fullest beneficial use is made of all water passing through the irrigation works is not attained in a day. As a district is brought to the peak of development, an increasing use of water may be anticipated, and also a more efficient method of use, with resultant decrease in the amount of abandoned waste, spill, and seepage. In this process of growth, the discharge of a considerable volume of artificial flow over a long period of formative 3ears should not and does not invariably constitute an abandonment by the district of its right to such waters, or impose upon it a duty to always maintain the same volume of discharge. In this connection, the following observation made in a case concerning the government’s right to recapture waste waters is pertinent:

“One who, by the expenditure of money and labor, diverts appropriable water from a stream, and thus makes it available for fruitful purposes, is entitled to its exclusive control so long as he is able and willing to apply it to beneficial uses, and such right extends to what is commonly known as wastage from surface run-off and deep percolation, necessarily incident to practical irrigation. Considerations of both public policy and natural justice strongly support such a rule.” (Note 89 A. L. R. 212, quoting from United States v. Haga, 276 Fed. 41.)

To summarize, one who produces a flow of foreign water for beneficial use and thereafter permits it to drain down a natural stream channel, is ordinarily under no duty to lower claimants to continue importing the supply or to continue maintaining the volume of discharge into the second stream channel at any fixed rate. The rule may have exceptions, as perhaps where the artificial condition has become inherently permanent and there has been a dedication to the public use, or where the drainage is stopped wantonly to harm a lower party, without other object. But as a general proposition, an irrigation district, after importing water from one river, passing it through irrigation works, and discharging it into a natural creek bed in the second watershed, may change the flow of water imported or the volume of water discharged from its works into the second stream, or stop the flow entirely, so long as this is done above the point where the water leaves the works of the district or the boundaries of its land. An exception to the rule is not created by the fact that the district may act upon the water a second time while in its possession, by retaking it at a point of drainage for further beneficial application.

In the present case the recapture of the water from the stream channel by defendant district, upon its own land,, and the use of the channel as a temporary drain, neither adds to nor detracts from plaintiffs’ claims to the artificial flow. The right to use a natural channel as a temporary conduit or as a drain for artificial flow has been frequently upheld. See cases digested in note, 89 A. L. R. 210. There are cases where even after a foreign flow has left the land and control of its producer, he has been permitted to recapture it from the second stream, when it has been shown that such recaptur'e was a part of his original project, and the water was discharged into the stream, not simply to be rid of it, but for the express purpose of retaking at a lower point. Where the recapture occurs before the foreign flow passes from the lands and control of the producer there can be no doubt of his right to make temporary use of a channel traversing his property, so long as normal conditions on the stream are not injuriously affected thereby. In such case the stream bed merely serves the purpose of the drainage ditch which might be constructed were no natural channel available. (See Hoffman v. Stone, 7 Cal. 46; Butte Canal & Ditch Co. v. Vaughn, 11 Cal. 143 [70 Am. Dec. 769 ] ; E. C. Horst Co. v. New Blue Point Min. Co., supra, at p. 636; 26 Cal. Jur., p. 143 et seq.; Kinney on Irrigation and Water Rights, 2d ed., vol. 2, p. 1457 et seq.; Wiel on Mingling of Waters, supra.)

Plaintiffs suggest, although with little vigor, that the doctrines of estoppel, adverse possession, or nonuser may be invoked to sustain their position. The findings of the court bearing on these subjects have already been set forth. The most that can be said on behalf of plaintiffs is that defendant, with knowledge of plaintiffs’ construction of diversion works, stood silent. But in the absence of other essential elements neither expenditures by plaintiffs, defendant’s knowledge thereof, nor its silence are sufficient to establish an estoppel. There is no showing whatsoever of any degree of turpitude in the conduct of defendant which would estop it from assertion of its title before a court of equity. (See Biddle Boggs v. Merced Min. Co., 14 Cal. 279, 367 et seq.; Dougherty v. Creary, 30 Cal. 290, 291 [89 Am. Dec. 116] ; Stockman v. Riverside L. & I. Co., 64 Cal. 57 [28 Pac. 116]; Verdugo Cañon Water Co. v. Verdugo, 152 Cal. 655, 674 [93 Pac. 1021] ; Kinney on Irrigation and Water Rights, 2d ed., vol. 2, p. 2034 et seq.; Wiel, Water Rights in the Western States, secs. 593, 594, 3d ed., vol. 1. ) As to adverse possession, it is apparent that plaintiffs’ taking of the foreign water at its point of diversion was not hostile to defendant’s title, but was a mere taking of certain water (the corpus as distinguished from the water right), to which defendant had relinquished all claim.

The judgment is reversed.

Houser, J., concurred in the judgment.

Rehearing denied.


author: CURTIS, J.

text:
    [L. A. No. 16454.
    In Bank.
    April 26, 1939.]
    In the Matter of the Estate of WILL WALLACE BENNETT, Deceased. ALFRED SIEMON, as Executor, etc., Appellant, v. MORTGAGE INVESTMENT COMPANY OF LOS ANGELES (a Corporation), Respondent.

      Siemon & Claflin, Alfred Siemon, T. B. Claflin and Bennett Siemon for Appellant.
    Earle M. Daniels and Burdette J. Daniels for Respondent.
   CURTIS, J.

This is an appeal by the executor of the last will and testament of W. W. Bennett, deceased, from the order settling the final account of the executor and final decree of distribution in said estate.

In the will of the deceased, a number of special bequests were made, and the residue of the estate was given to his two daughters, Inez B. Siemon and Edna B. Allen. The executor qualified on February 8, 1934. An inventory was filed showing the value of the estate to be slightly less than $10,000. The first publication of notice to .creditors was on February 14, 1934. The time for presentation of claims expired on August 14, 1934. Three claims were presented against the estate which were allowed and paid by the executor. The special bequests were paid in full. The executor then paid on September 1, 1934, to the two residuary legatees, Inez B. Siemon and Edna B. Allen, the sum of $1,075. All of these payments were made by the executor without any order of court and before the filing of any account of his administration, and before the filing of his petition for distribution.

On September 26, 1934, the respondent herein, the Mortgage Investment Company, having theretofore recovered a deficiency judgment against the said Edna B. Allen, purported to garnishee the money due the said Edna B. Allen from said estate. For that purpose respondent had issued a writ of execution on said deficiency judgment to the sheriff of Kern County, the county of which said executor was a resident, and said sheriff on September 26, 1934, served a copy of said writ of execution, together with a notice that the interest of said Edna B. Allen, in said estate, was attached. A writ of execution on said deficiency judgment was also issued to the sheriff of the county of Los Angeles, and the sheriff of said county of Los Angeles on the 27th day of September, 1934, served a copy of said writ of execution upon the clerk of the Superior Court of the County of Los Angeles, together with a notice to said clerk that the interest of Edna B. Allen in the personal property of the estate of said deceased was attached.

Subsequently said executor filed his final account and petition for distribution. In said account and petition he set forth the payment of the sum of $1,075 to each of the two residuary legatees, the said Inez B. Siemon and Edna B. Allen. The respondent, the Mortgage Investment Company, filed its objection to said account and petition for distribution in which it set forth that it had recovered said judgment against Edna B. Allen, the issuance of said writs of execution and the service of the same upon the executor and the clerk of the Superior Court of the County of Los Angeles. Objection therein was made to the item of $1,075 paid to Edna B. Allen, and also to the item of $350, which was listed in the account as paid to the surviving widow of said deceased, on account of her family allowance, the objection being that the sum of $350 exceeded the amount legally due on the family allowance in the sum of $110. No objection was made to the item of $1,075 paid to Inez B. Siemon.

The final account and petition for distribution, together with said objection thereto, came on for hearing. Evidence was introduced and the matter was submitted for decision. The court made findings of fact in which it found, among other facts, that the residuary legatees, Inez B. Siemon and Edna B. Allen, had each been paid the sum of $1,075 on or about September 1, 1934, and the sum of $274.83 subsequently thereto, and as to these payments, amounting to the sum of $1349.83 paid to each of said residuary legatees, “the court further finds that all of said payments paid to said residuary legatees were made without any order of court as provided in section 1010 of the Probate Code of the state of California and were illegal and void, and that said executor exceeded his powers and authority in making said payments, and said payments constitute a ratable distribution and that said payments were not reasonable payments to be made by said executor without obtaining order of court”. The court found in favor of the respondent as to its claim that the amount due Edna B. Allen had been legally garnisheed by the proceedings in execution taken under the deficiency judgment in favor of respondent and against said Edna B. Allen. It also found that the payments on account of the family allowance had exceeded the legal amount due thereon in the sum of $110. Upon these findings of fact, following the conclusions of law made by the court, it was ordered that the executor pay to each of said residuary legatees, Inez B. Siemon and Edna B. A11p.n; the sum of $1349.83, and that “said executor deliver the share of Edna B. Allen, residuary legatee in said estate, in the sum of $1349.83 to the sheriff of the County of Los Angeles, State of California, in accordance with law and subject to the rights of the parties”. In its order approving said final account the court allowed the sum of $240 only on the family allowance, thereby reducing the amount set forth in the final account by the sum of $110.

From this order settling the final account and the decree of final distribution the executor has appealed. The order settling the final account and the decree of distribution is in one instrument or document entitled, “Order and Decree of Settlement of Account and Final Distribution”.

It is the contention of the appellant that the probate court erred in refusing the executor credit for advancements made to residuary legatees upon the hearing of the final account and petition for distribution where all claims and expenses of administration had been paid in full and the estate had been fully administered and was ready for final distribution. This contention we think must be sustained. The question as to the duty of the probate court upon the final distribution of the estate to give credit to the executor on account of advancements prior to final distribution has frequently been before the appellate courts of this state, and so far as our research has extended, has been without an exception decided in accordance with the contentions of the appellant as set forth above.

In In re Moore, 96 Cal. 522 [31 Pac. 584], the administrator of the estate advanced to the widow of the deceased the sum of $6,000. The probate court upon final distribution charged the administrator with this sum, together with interest thereon from the time of said advancement, and allowed the administrator to retain the widow's distributive share of any moneys of this estate as part payment thereof, but denied the administrator any lien on the property of the widow remaining in the hands of the administrator to secure payment of money advanced to her in excess of the actual amount of money coming into his hands and due the widow. Both the widow and the administrator appealed from said decree of distribution. The appeal of the widow was denied, the court holding (p. 528) : “She has retained the money, and upon the most obvious principles of justice, this fact must be taken into account in the final distribution of the estate. In settling the accounts of the administrator, and in ascertaining the distributive shares of those entitled to succeed to the estate of a deceased person, and in adjudging what shall satisfy the decree of distribution, the superior court, in the exercise of its probate jurisdiction, proceeds upon principles of equity, and may so frame its judgments as to do exact justice in regard to all matters properly entering into the account of the administrator, and which, in the application of equitable rules afEeet the distributive shares of the estate.” On the appeal of the administrator the decree of distribution was reversed. In reversing the judgment the court held (p. 530) : “The superior court, as we have seen, held that the amount of money distributed to the widow might be applied by the administrator upon the amount found by the court to be due him on account of the advances made by him, but as to the balance due after applying this money in his hands, the court held it had no power to give him any relief. We think that in so holding the court was in error. The administrator was entitled to a decree that the amount advanced by him to the widow was a charge against her entire distributive share of the estate, whether the same consisted of money or real estate, or both; if her share of the money of said estate distributed was not sufficient to pay such advances, the court should have made the distribution of her share of the real estate as subject to the payment of the amount found to be due from her to the administrator by the decree. The court had the right to so decree, as incident to its general power to state the account between the parties in accordance with justice and equity, and in the settlement of which account, on such a basis, the court must necessarily ascertain what the widow has already received from the administrator on account of her distributive share of the estate. ’ ’

In the Estate of Kennedy, 120 Cal. 458 [52 Pac. 820], an appeal was taken from an order surcharging the final account of the executor with the sum of $4,500. The facts of this case ar,e much involved and it is not necessary to set them forth in order to understand the final conclusion of the court modifying the order settling said final account. This conclusion was stated as follows: ‘‘ Therefore, against the sum of $4,500 surcharged, the executor should be allowed credit of $2,250 paid as an advance to Frederick E. Kennedy and chargeable against his distributive portion of the estate. ’ ’

In the Estate of Mitchell, 121 Cal. 391 [53 Pac. 810], the decree for partial distribution was reversed. In that estate the executor advanced to certain legatees sums of money during the administration of the estate for which the probate court refused to give him credit as against the amounts due said legatees. The court was of the view that the order of the probate court in certain particulars was “quite indefinite”. But, said the court (p. 395) : “Waiving this question, however, and the fact remains that there was positive error in ordering the whole of the legacies paid, as shown by the will, without deducting therefrom the sums of eleven hundred and sixty-six dollars and thirty-three and two-thirds cents paid to each of the legatees, after the original hearing and before the final hearing, and which payments were admitted on such final hearing to have been received by petitioners. ’ ’

It will be noted that in each of the eases cited above the order or decree of the probate court in which the executor or administrator was refused credit for advancements made to legatees was reversed by this court. It cannot be argued therefore that it is discretionary with the probate court to credit said executor or administrator with 'the sums advanced to legatees. On the other hand, the only reasonable construction to be placed upon these decisions is that it is mandatory upon the probate court to credit the executor or administrator with the amount thus advanced to legatees when no rights of third parties have intervened.

The principal contention of respondent is that the act of the executor in making said advancements without previous authorization by the probate court as required by section 1010 of the Probate Code was unlawful and constitutes an attempt to entrench upon the exclusive jurisdiction of the probate court and was an infringement upon the rights of all persons interested in the estate. This contention of the respondent flies in the face of the three decisions of this court herein-before cited, and is not supported by any authority to which our attention has been called. The principal authority relied upon by the respondent is the case of Estate of Willey, 140 Cal. 238 [73 Pac. 998]. The appeal in that case was from an order settling the final account of executors. It did not in any manner involve the decree of distribution. Advances had been made to certain devisees for which the executors sought to have credit in their final account. The probate court refused to allow credit for such advancements and in affirming the order of disallowance this court made it plain that the only matter before the probate court was the final account, and that the claim that credit should be allowed the executors for such advancements could not be considered on the hearing of the final account, but was a proper subject for consideration and determination on the hearing of the petition for final distribution. This is made apparent from the following language of the opinion on page 242: “It must be apparent that, as these matters, which may so radically affect the right of the beneficiaries under any will, can only be legally and effectively determined upon distribution, any effort to have them determined in settling an account must in the nature of things be out of place. We are satisfied that the only items which are properly to be settled in an executor’s account are items relating purely to his administration of the estate—charges of administration and payments of debts of the decedent. We do not mean to hold that the executor is not entitled to be reimbursed for payments which he may make under the terms of the will, nor to be credited with distributive shares which he may have turned over. We simply hold that credits therefor are not to be given upon the settlement of accounts, but are to be retired therefrom and considered upon the distribution of the estate. And we understand this to be the law as laid down by this court. (Estate of Rose, 80 Cal. 166, 179 [22 Pac. 86].) Upon the hearing for distribution the court, in harmony with its general equitable powers, can adjust all matters between the legatees or distributees and the executors, and credit the latter against the estate distributed to the former for all advances which may have been made to either of them under the terms of the will.”

This language is particularly pertinent to the appeal in the instant case. As before noted, the appeal is from the “Order and Decree of Settlement of Account and Pinal Distribution”. While the final account and petition for distribution were filed separately and at different times the two matters were consolidated and heard together, and but one set of findings and one decree was made by the court in its final determination of the two matters before it. Both in the final account and in the petition for distribution the executor asked to be credited for the amounts paid to the two residuary devisees. Conceding that it was improper to allow credit on account of the money advanced to these distributees in the hearing of the final account, it was perfectly proper to consider and allow credits for said advancements on the petition for distribution. It was so held not only in the authorities cited by the appellant but also by the decision in the Estáis of Willey, supra, relied upon by the respondent.

Respondent also relies upon certain language found in the Estate of Guglielmi, 138 Cal. App. 80 [31 Pac. (2d) 1078]. This ease, like the case of Estate of Willey, supra, instead of supporting the position of respondent, is an authority expressly in favor of the appellant. In that case the probate court refused to allow the executor credit for advances made to three beneficiaries named in the will of the deceased. This order of the probate court was reversed and it may be stated here that the Estate of Guglielmi, supra, is another definite authority against the contention of the respondent that it is discretionary with the probate court to allow or disallow credits for advancements made to heirs or beneficiaries in the final distribution of the estate. In the Guglielmi case, as in others cited herein, the court, as we have seen, reversed the probate court for its failure to allow credit for advancements, not that the court abused its discretion, but that it committed prejudicial error in disallowing credit to the executor for advancements made to an heir or beneficiary.

That the case of Estate of Guglielmi, supra, supports the contention of appellant that credits should have been allowed for advancements made by him to the two residuary legatees clearly appears from the following statement in the opinion in said case (p. 92) : “Manifestly, if these three beneficiaries were entitled to the net income derived from the management of the estate as a whole and if the advances made to them by the appellant were from that net income alone he should not be charged to account to the estate in full for those advances or for interest as if he had defaulted or misapplied the funds to his own use. On the other hand, if, upon final distribution, it be found that the nephew is dead and that the brother and sister are then entitled under the will to the entire residue, then the amounts advanced to them by the appellant may be held to have been advanced on account of their credit accordingly.”

Other authorities from this and jurisdictions out of the state might be cited, but we think those cited are sufficient to show that the probate court in the instant case erred in holding that the payments made to the two residuary legatees without any order of the court as provided in section 1010 of the Probate Code were illegal and void and that said executor exceeded his powers in making said payments without a compliance with said provision of the Probate Code. The authorities are in perfect accord upon the subject of such payments in holding that the executor acts at his peril in making said advancements, but “if he pays the right persons their proper share, he is protected, whether it is done under sanction of the court or not, or before or after passing of his account; but not if he pays the wrong person”. (3 Woerner, 3d ed., American Law of Administration, p. 1937.) There is no question in this case but that the payment of $1349.83 to Inez B. Siemon was made to the proper person. No one else had any claim to the'money paid to this legatee and it was error for the probate court not to allow the executor credit for this payment.

As to the payment of the sum of $1,075 to the residuary legatee, Edna B. Allen, a further question is involved. The court found that this payment was made to her on or about September 1, 1934, and that on or about September 27, 1934, a writ of execution, issued in pursuance of a deficiency judgment in favor of respondent in an amount in excess of $5,000 in an action in which respondent was plaintiff and said Edna B. Allen was defendant, was served upon said executor and the clerk of the court, and filed with the papers and pleadings in said court in accordance with section 561 of the Code of Civil Procedure.

Respondent claims by these proceedings under said writ of execution that there was garnisheed and attached all money and personal property in the hands of said executor belonging to said Edna B. Allen, including said sum of $1,075 which had been paid to said Edna B. Allen by said executor on or about September 1, 1934. No point is made that the court found that this money was paid and the execution was levied “on or about” the respective dates, stated in the court’s findings. We assume therefore that according to the findings the money was paid out by the executor some twenty-six days before the levy of the execution.

An attaching creditor, and the same rule applies respecting a judgment creditor, takes only such rights or interest as his debtor had at the time of the service of the writ of attachment. (Walker v. Doak, 210 Cal. 30, 34 [290 Pac. 290]; McGee v. Allen, 7 Cal. (2d) 468 [60 Pac. (2d) 1026].) A garnisher stands in no better position than does the debtor. (Clecak v. Dunn, 95 Cal. App. 537 [272 Pac. 1104].) Garnishees will only be held for debts owing at the time of service of the writ, and property and credits which have been transferred or assigned by the debtor cannot subsequently be subject to garnishment as belonging to him. (Van Orden v. Anderson, 122 Cal. App. 132 [9 Pac. (2d) 572].) “A creditor has no better claim to a fund than the beneficiary has, and when the latter has no right to maintain an action for it, garnishment proceedings against the trustee is unavailing.” (Walker v. Doak, supra. “The'general rule is that a creditor stands in exactly the same attitude in relation to a garnished fund that the judgment debtor does and can enforce only such rights as the debtor might enforce.” (12 R. C. L., p. 778.)

As the executor had made a legal payment to Edna B. Allen of said sum of $1,075 prior to the service of said writ of execution, no part of said sum could have subsequently been recovered from him by said Edna B. Allen. It follows therefore that no part of said sum was subject to said garnishment proceedings under said writ, and the judgment creditor acquired no rights therein as against said executor. The executor owed no duty to any creditor of any distributee, and no rights of creditors were infringed by the payment to the distributee of money in his hands belonging to said distributee, before the settlement of his account. “Nor are any rights of creditors of a distributee of an estate infringed by the payment by the administrator to the distributee of his distributive share without notice to creditors or before the passing of his account.” (4 Am. Jur., sec. 420, p. 815.) It has also been held that, ‘‘ There is no duty cast upon the administrators or executors to ascertain the creditors, if any, of the distributees, or to notify them of his intention to distribute the estate, and he assumes no risk, so far as they are concerned, in paying to the distributees, before the passing of an account, the distributive shares to which they are entitled, therefore if the administrator in this ease paid to the distributee the amount to which he was entitled, though paid before the passage of the administration account, no rights of attaching creditor has been infringed upon.” (American Agricultural Chemical Co. v. Scrimger, 130 Md. 389, 393 [100 Atl. 774, L. R. A. 1917F, 394].)

There is no intimation in the findings of the court that the payment of the $1,075 to Edna B. Allen was not made in perfect good faith and without any intention on the part of the executor to obstruct the respondent in the collection of its judgment against said distributee. On the other hand, the evidence in the case shows that the affairs of the estate were largely a family matter. The executor was the son-in-law of the deceased and the husband of one of the distributees, Inez B. Siemon. The two distributees were sisters, and the daughters of the deceased. After the payment of all claims against the estate and the special bequests there was sufficient money in the hands of the executor over and above the expenses of administration to pay to each of the two residuary legatees the sum of $1,075. Without waiting for the final distribution of the estate, the executor made payments to his wife and sister-in-law, and on the hearing of the petition for final distribution asked credit for the amounts thus advanced. The authorities cited hereinbefore clearly support the claim of the executor that he be given credit for such payment, and the probate court was in error in denying this claim of the executor.

Appellant makes the further contention that the garnishment proceedings were of no validity for the reason that the provisions of section 561 of the Code of Civil Procedure were not complied with on the part of respondent. The question of the validity of said proceedings becomes material notwithstanding our conclusion that the executor was entitled to credit for the advancement'of $1,075 to each of the two residuary distributees, for the reason that according to the findings of the court, after the payment of said sum to Inez B. Siemon and Edna B. Allen on September 1, 1934, there came into the hands of the executor a further sum claimed by the executor to be $665.32. On November 29, 1935, the executor paid one-half of said amount, $332.66, to each of said two distributees. The court found that each of said legatees was entitled only to $274.83, and that the difference in these two amounts, or $57.83, was a voluntary payment, and charged the executor’s account with this overpayment to each of said legatees. No exception is taken to this part of the order charging the executor’s account with the sum of $57.83 paid to each of said distributees, but it is contended that the garnishment proceedings were of no validity and therefore the executor should be given credit for the sum of $274.83 which he paid to Edna B. Allen on November 29, 1935. This sum of $274.83 is referred to in the statement of facts hereinbefore set forth and together with said sum of $1,075 makes a total of $1349.83 which the court found was paid by the executor to Edna B. Allen and which the court in its final decree of distribution ordered the executor to pay to the sheriff of the county of Los Angeles in pursuance of said garnishment proceedings.

Section 561, Code of Civil Procedure, is the only authority under which the interest of a legatee in personal property in the custody of the executor may be reached by attachment or garnishment. Prior to its enactment in 1923 personal property in the hands of an executor was deemed to be in the custody of the law and as such was not subject to attachment or execution. Therefore, in order now to reach the interest of an heir or legatee in personal property in the possession of the executor by proceedings in attachment or under execution, the provisions must be followed.

As was said in Estate of Troy, 1 Cal. App. (2d) 732, 735 [37 Pac. (2d) 471]: “This section provided a remedy where none had theretofore existed and laid down the procedure for making the remedy effective.” Did the garnishment proceedings in the instant case follow the procedure provided by said section ? The undisputed facts show that a writ of execution was issued out of the superior court of the county of Los Angeles upon the judgment in favor of respondent and against said Edna B. Allen and directed to the sheriff of the county of Kern in which the executor resides. This execution was served on the executor by the sheriff of Kern County by delivering to the executor a copy of said' execution, together with a notice that the personal property in his hands belonging to Edna B. Allen was attached. No copy of this writ of execution or a copy of this notice was ever filed in the office of the clerk of the probate court of the county of Los Angeles, as required by said section 561 of the Code of Civil Procedure. Instead of following the procedure provided in said section, the record shows that a second writ of execution was issued in said action of respondent against Edna B. Allen to the sheriff of the county of Los Angeles, which was never served upon the executor, but a copy of said writ was served upon the clerk of the probate court, together with a notice that the interest of Edna B. Allen in the estate of W. W. Bennett was attached. These facts are undisputed and clearly show that respondent failed to follow the procedure provided by section 561 of the Code of Civil Procedure in order to effect a legal garnishment of the interest of a judgment debtor in personal property in the hands of an executor.

This was not, in our opinion, even a substantial compliance with the provisions of section 561 of the Code of Civil Procedure for under this procedure we have two officers levying upon the same property for the same judgment creditor in the same action. The question might well arise with the court when it came to make a distribution of the money levied upon as to which of the two officers it should order the money delivered, and in all probability that question did arise in the instant proceeding, for the court ordered the money to be paid to the sheriff of the county of Los Angeles when clearly it was the duty of the court to order the payment to the sheriff of the county of Kern, if the provisions of section 561 of the Code of Civil Procedure had been complied with. This section provides that “delivery of such property shall be ordered to "the officer making the levy”, and the officer making the levy is the officer “serving the personal representative of the decedent” (in this case the executor). The provisions of section 561 of the Code of Civil Procedure are clear and unambiguous. No difficulty should be experienced in following the procedure therein outlined. By so doing the rights of all parties will be protected and the confusion which now exists in the present proceeding as to the officer to whom the money should be ordered paid will be avoided.

Furthermore, section 561 of the Code of Civil Procedure is a departure from the well-settled common-law rule that property in custodia legis is not subject to attachment or garnishment.

The respondent having failed to follow the procedure outlined in said section 561 of the Code of Civil Procedure cannot claim the benefit of this section, and therefore acquired no interest in the personal property in the custody of the executor and belonging to the judgment debtor in the civil action.

The probate court correctly held that the executor had overpaid the family allowance in the sum of $110. While respondent has no interest in any of the property of said estate and this overpayment is of no concern to respondent, it was the duty of the probate court without objection of any person whatever to carefully scrutinize the final account of the executor and disallow any item therein which was not a proper and legal charge against the estate.

For the foregoing reasons the order and decree appealed from is reversed with directions to the probate court to allow as credit to the executor in his final account and petition for distribution the two items of $1349.83 paid to each of the two residuary legatees, Inez B. Siemon and Edna B. Allen, as advancements made to them by said executor during the administration of said estate on account of the distributive share to which they were respectively entitled under the last will and testament of the said W. W. Bennett, deceased.

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