text:
    [S. F. No. 16338.
    In Bank.
    June 14, 1940.]
    VIOLET HUDDY, Respondent, v. THE CHRONICLE PUBLISHING COMPANY (a Corporation), Appellant.

      George K. Ford and Simpson Finnell, Jr., for Appellant.
    R. G. Partridge and Wallace O’Connell for Respondent.
   CURTIS, J.

In this action plaintiff sought to recover judgment for personal injuries suffered by her when an automobile in which she was riding as a guest in the city of San Francisco was struck by a Hupmobile sedan driven by Donald O’Brien, an employee of the 'Chronicle Publishing Company. It was alleged in the complaint that the proximate cause of the collision was the negligent operation of said Hupmobile sedan by Donald O’Brien, and that at the time of said accident said automobile was being operated and driven by him as the agent, servant, and employee of the Chronicle Publishing Company. Before trial the case against 0 ’Brien was dismissed without prejudice. A motion for a nonsuit and for a directed verdict made by defendant was denied. At the close of an eight-day trial, a verdict was returned by the jury against the Chronicle Publishing Company in plaintiff’s favor in the sum of $3,231. From the judgment entered thereon, the defendant Chronicle Publishing Company has appealed.

The accident occurred between 11:10 and 11:30 P. M. on the night of January 28, 1937, on Potrero Avenue just south of its intersection with Twenty-fourth Street. Appellant does not deny that the proximate cause of the collision was the negligent operation of the automobile by 0 ’Brien. Appellant does deny that 0 ’Brien, who was employed by it in its home delivery department, as manager of district N, was engaged at the time of the accident in any service for the Chronicle Publishing Company, and insists that there is not sufficient evidence in the record to support the implied finding of the jury that he was at the time and place of the accident acting within the scope of his employment.

Appellant relies upon the fact that the employment of O ’Brien as district manager in the home delivery department required him to perform specific work in connection with the distribution of the Chronicle newspapers to carriers under him in a specified district and during certain specified hours, and that the accident happened outside the limits of O ’Brien’s district and at a time when his regular duties in connection with the distribution of Chronicles to his carriers did not require him to be at work. At the outset it may be admitted that O’Brien was not engaged at the time of the accident in his regular duty of delivering papers to the carriers in his district for distribution by him on their regular routes. His regular duty in this regard did not require his presence at the appellant’s plant until about 3 A. M. each morning when he received the bundles of newspapers which came down the chute to the sidewalk at the Fifth Street entrance to the Chronicle building. In order to deliver the papers to the twenty carrier boys under him, it was necessary for him to own a car, and he was paid $30 per month as allowance by the Chronicle for the use of his car. He usually completed his deliveries by 6:30 A. M. and his time was his own until a short time prior to 3 P. M. when he was required to report to the city circulation manager in charge of the district managers employed by the home delivery department to go over with the city circulation manager any details which were necessary to his work, such as giving notice of “stops” and new subscriptions. He was then through with the regular routine duties connected with the distribution of the papers until the next morning at 3 A. M. The accident, as before noted, occurred between 11:10 and 11:30 P. M. and outside the limits of his district.

Respondent while admitting that 0 ’Brien was not performing the specified work of delivering papers to the carriers in his own specified district and during the specified hours which this particular duty required, points out that his duties were not limited merely to the delivery of the newspapers to the carrier boys and reporting to the city circulation manager, but included any act which he might deem desirable for the betterment of the service, such as visiting the carriers under him to school them in their duties, or to encourage them to secure new subscribers, as each district manager had to maintain a certain production record throughout the month. District managers occasionally supervised the collection by the carriers, and if any carrier was delinquent, his district manager was “supposed to go into the matter with him”. The duties of the district manager also consisted in picking up, at the end of each month, the newspapers which had not been sold by the carriers and returning them to the Chronicle so that each carrier could receive credit for the newspapers so returned. It should be noted with reference to the duty on the part of district managers of picking up “returns” and delivering them to the Chronicle that it was necessary that the newspapers be picked up and turned in on a certain stipulated day when a special man was on duty at the plant for the purpose of checking them in, and if they were not returned at the end of the month at the stipulated time, they could not be returned until a month later, and no credit would be given to the carrier boys until the following month.

It is respondent’s position that O’Brien, at the time of the accident, was either engaged in attending to one of these duties which were in fact as much a part of his employment as his regular routine duty of delivering the home delivery papers to his carriers within his district, or that he had been pressed into special service to deliver “extras” bearing news of the settlement of the longshoremen’s strike, which had been tying up the port of San Francisco, to the Bayshore dog tracks, and was on his way to the Bayshore dog tracks when the accident happened. Only O’Brien himself could testify directly as to the mission on which he was engaged at the time and place of the accident, whether he was in fact engaged in a personal mission of his own, or engaged in performing a service for the Chronicle Publishing Company. It appears that he was removed from the emergency hospital to St. Mary’s hospital, and that he thereafter left the state without returning to his employment with the Chronicle Publishing Company. A letter was afterwards received by the city circulation manager from Nevada, but the letter was not preserved, and his whereabout were apparently unknown at the time of the trial. It is obvious that in the absence of the testimony of O’Brien, plaintiff was necessarily limited in attempting to prove the issue of his employment at the time and place of the accident, to proof of facts and circumstances from which an inference of his employment could logically and reasonably arise, and the defendant was likewise limited to proof of facts and circumstances which would logically and reasonably disprove any inference of such employment, the burden in the first instance being upon the plaintiff to establish a prima facie case before it was incumbent upon the defendant to offer evidence in opposition thereto.

The first question to be asked and answered, therefore, is whether plaintiff has initially established a prima facie case with reference to this issue of employment. Section 1958 of the Code of Civil Procedure states that, 1 ‘ An inference is a deduction which the reason of the jury makes from the facts proved without an express direction of law to that effect,” and section 1960 of the same code states that, “An inference must be founded: (1) On a fact legally proved; and (2) On such a deduction from that fact as is warranted by a consideration of the usual propensities or passions of men, the particular propensities or passions of the person whose act is in question, the course of business, or the course of nature.” Two facts were definitely and positively proved and established by plaintiff which in our opinion reasonably warrant the deduction therefrom that O’Brien at the time and place in question was engaged in performing a service for the Chronicle Publishing Company. First: There was affixed to the windshield of O’Brien’s car a “Press Car” card, bearing the owner’s name, the car number and the signed authorization of the circulation manager of the Chronicle Publishing Company, which card according to the testimony of said circulation manager, himself, was to be used by Chronicle employees only while on duty. Second: There was piled up on the rear seat of the Hupmobile and on the floor to the level of the rear seat, four or five bundles of Chronicle newspapers of approximately 100 copies to the bundle, tied around with hemp rope in the manner in which said newspapers are usually wrapped for delivery to the various newsboys and carriers around the city.

The first fact, “legally proved”, upon which respondent justifiably relies to warrant the inference of employment of O’Brien by appellant at the particular time and place was the fact that at the time of the accident, O’Brien was displaying on the lower right-hand corner of his windshield a “Press Car” card on which, under the words, “Press Car”, appeared the words, “San Francisco Chronicle”. Four witnesses, one of whom was Mr. Neish, an employee of the Chronicle, testified that they had seen this “Press Car” card in the lower right-hand corner of the windshield of the Hupmobile immediately after the accident, and although the card disappeared after the accident, the fact that it was being displayed by 0 ’Brien at the time must be accepted as an established fact. Mr. Neish, who arrived at the scene of the collision immediately after it occurred, testified that he noticed the “Press Car” card and looked at the name on it to identify the driver of the Hupmobile sedan. He stated that the card displayed by O’Brien, in addition to the words, “Press Car, San Francisco Chronicle ’ ’, also bore the car number, the owner’s name and the proper authorization. A “Press Car” card was introduced in evidence and identified by Mr. Neish as being similar to the card which he saw displayed on the windshield of the Hupmobile sedan. This card is a white card, 10 inches by 5 inches, printed on heavy white cardboard.

This “Press Car” card, according to the testimony of Mr. Gilroy, circulation manager of the Chronicle, was the official sign put out by the Chronicle and was issued to its employees under strict orders that the signs were not to be used except when the employees were on duty. Appellant attempted to prove that the use of the card was restricted to the immediate vicinity of the Chronicle building, being furnished to the drivers who delivered its newspapers to enable them to secure parking space there. This attempted limitation of the use of the “Press Car” card to the immediate vicinity of the Chronicle building was offset by the testimony of Mr. Maguire, the news vendor for the Examiner at the corner of Twenty-fourth Street and Potrero Avenue, who testified that he frequently saw cars with such signs pass his corner. It should be here stated that although the appellant has consistently spoken of this “Press Car” card as a “sticker” thereby giving the impression that it was permanently attached, and that it was on the car at all times irrespective of whether the driver was or was not on company business, there is not an iota of evidence in the record to indicate that such card was in fact permanently attached to the windshield of O’Brien’s car, whether by pasting or by any other means. None of the witnesses who testified to seeing the card was able to remember how it was attached. We have examined the “Press Car” card, which was introduced in evidence as an exhibit and identified as being similar to the card displayed by O’Brien, and there is nothing whatever in the make-up of said card to indicate that it was intended to be permanently affixed. It may be said parenthetically that the fact that the “Press Car” card disappeared after the accident and could not be found might be some indication that the card was not firmly-pasted on the windshield.

The second foundational fact upon which respondent justifiably relies as giving rise, in conjunction with the display of the “Press Car” card, to the inference that O’Brien was engaged in a service for the benefit of the Chronicle Publishing Company is the fact that at that time he was transporting four or five or more bundles of Chronicle newspapers tied up with hemp rope as if for delivery. There is some question as to whether the papers contained headlines relative to the settlement of the longshoremen’s strike and bore the word, “Extra” across their face, or whether they did not, but in view of the overwhelming testimony of at least three disinterested witnesses, including Mr. Neish, the Chronicle employee, there can be no question that in fáct there were several bundles of Chronicles tied up with hemp rope in the rear of O’Brien’s car at the time of the accident. These bundles of newspapers disappeared after the accident. Mr. Nicolini, a drayman, who was standing at the corner of Twenty-fourth Street and Potrero Avenue, having just bought an Examiner from the news vendor there when the collision occurred, testified that he looked in the rear of the Hupmobile sedan after the accident through the right-hand door which was open and saw four or five bundles of Chronicle newspapers across the back seat tied with hemp rope and that there was stacked on the floor behind the front seat other bundles to the level of the rear seat. One of the bundles on the floor was broken open. He testified that the headlines on all the papers were identical and had the word “Extra”, the name, “Chronicle”, and “something about the stevedores going back to work”. Mr. Hansen, who was employed in the Purity Store at the corner of Twenty-fourth Street and Potrero Avenue, testified that he saw bundles of newspapers in the rear of the Hupmobile sedan, tied with a rope in bundles of about a foot and a half high, and stated that there were some loose ones on the floor. He looked in through the rear window and saw they were Chronicles but did not notice whether or not the word “Extra” was on the front page. Mr. Gray, a municipal railway motorman, testified that he had gone over to the Hupmobile after the accident, and had noticed that the rear fender “was lower down than usual” over the rear wheel. Mr. Neish, the Chronicle employee, testified that there were a few papers spilled on the street and there were papers inside the car that were partially tied up. He stated that they were tied up loose with rope. His testimony was: “The papers were on an angle in the back of the car, and they were loose. The rope had not been cut, but they were just loose papers. It slid out from under the tie of the rope.” He had not examined the papers as to dates and did not notice any headlines on the papers with reference to the marine strike being settled. Mr. Lown, who examined the Hupmobile the next morning at the garage to which it had been towed, testified that he found no bundles of newspapers in the ear and no rope, that there were no newspapers on the rear seat but there were a number of newspapers scattered on the floor in the rear which bore various dates just previous to the accident. From the presence of such a large quantity of newspapers .in the car of its employee, it seems quite reasonable and logical to infer that such employee was engaged in performing a service for his employer.

We are of the opinion that these two facts, “legally proved”: the existence of the “Press Car” card on the windshield of the automobile which the Chronicle employee was driving at the time, and the presence of such a large quantity of Chronicle newspapers as he was transporting at the time, are quite convincing proof of the active engagement of' such employee in the service of the company, and makes the inference that he was so engaged seem logically much more reasonable than the contrary inference that he was not so engaged.

While it was not possible for the respondent in the absence of O’Brien to positively establish the exact errand on which O’Brien was engaged at the time, and we do not deem this necessary in view of the fact that his duties, other than his routine duty of delivering papers to his carriers, were not limited to any particular time and place, two plausible explanations have been suggested. While appellant has offered evidence which is quite convincing, and if believed by the jury would have compelled the conclusion, that the second explanation of O’Brien’s errand was not the correct one, nevertheless, no evidence at all has been offered to disprove the first explanation. In the absence of such proof, appellant has failed to overcome and dispel the inference which constitutes respondent’s prima facie case with reference to the issue of employment.

In Engstrom v. Auburn Auto Sales Co., 11 Cal. (2d) 64 [77 Pac. (2d) 1059], it is stated that “an inference is dispelled as a matter of law when it is rebutted by clear, positive and uncontradicted evidence, which is not open to doubt, even though such evidence is produced by the opposite party. . . . Of course, if the opposition evidence is conflicting, vague or uncertain or is weakened by contradictions or improbabilities, an inference is not dispelled as matter of law.” With this rule in mind, we shall discuss the evidence with reference to the service on which O’Brien was engaged at the time.

The first explanation suggested is that 0 ’Brien was engaged in some duty connected with a pickup of the “returns”. As before noted, there is evidence in the record that one of the duties of a district manager was to pick up and return at the end of the month newspapers which had not been sold by the carriers and that they had to be returned at a special time to be checked in. The day of the accident was Thursday, January 28th, and the next day, Friday, the 29th, according to the records of the Chronicle Publishing Company was O’Brien’s day off. Usually the district managers picked up the “returns”, which took two or three hours, in the morning, but they could be picked up at night. O’Brien was “a good employee and the company was pleased with his work”. Mr. Tennant, city circulation manager, and O’Brien’s superior, stated that he had observed him on various occasions around the office at odd hours and that it was a fair statement that he seemed quite wrapped up in the newspaper business and enthusiastic about his job. On the evening in question, Thursday, January 28th, he had seen O’Brien at the office when he, Tennant, left at 6:15 P. M. If the testimony of Mr. Lown that the newspapers which he found on the floor of the Hupmobile the next morning after the accident bore various dates just previous to the accident be accepted as proof that these same newspapers were among those present in the car at the time of the accident, the deduction seems reasonable therefrom that O’Brien at the time of the accident was engaged in his duty of picking up “returns”. This seems particularly reasonable in view of the fact that it was so close to the end of the month and the next day was O’Brien’s day off. No proof was offered by the appellant which would disprove this explanation such as proof from its employment records that none of the carriers delivering papers within O’Brien’s district lived outside the district, or that the “returns” for the month had already been collected and turned in.

There was also found by Mr. Lown in the glove compartment of the Hupmobile a book of subscription bills, a pad of deposit slips of the Bank of America, having printed at the top “The Chronicle Publishing Company, Carriers Account, at San Francisco-Main Office, Branch No. 66, Deposited by Route No.-”, and also a rubber stamp bearing this notation, “Pay to the Order of Bank of America, For Deposit to the credit of The Chronicle Publishing Company, Carriers’ Account, 66”. However, as it is quite probable that these articles were kept by 0 ’Brien in the compartment at all times, their mere presence would not be sufficient to give rise to an inference that he was on his way to contact a carrier with reference to his collections. The same criticism, however, is not applicable to the presence of the large quantity of newspapers, tied up in bundles, as it does not appear reasonable that in the absence of some task for his employer, he would be carrying them around in his car.

The second explanation is that O’Brien was pressed into service to deliver extras bearing news of the settlement of the longshoremen’s strike to the Bayshore dog tracks. This explanation is based primarily upon the testimony of Mr. Nieolini that the newspapers which he saw in the rear of the Hupmobile bore the headlines “Extra” and contained news about the stevedores going back to work. That he was endeavoring to reach the Bayshore dog tracks before the races were over and the “crowd broke” would afford some explanation of his erratic driving and breakneck speed, as the races usually closed around 11:10 and 11:15 P. M. While O’Brien’s routine job permitted him to leave the Chronicle building at 3 P. M. there is no testimony as to the time he actually did leave the building on the night in question, and the testimony of the city circulation manager was that O’Brien was there when he left at 6:15 P. M„ Potrero Avenue is on the direct route to the Bayshore dog tracks. While the appellant denied using “relays” or extra men to deliver their bundles of papers when their regular delivery men were not available there was testimony of the Examiner news vendor at the corner of Twenty-fourth Street and Potrero Avenue that infrequently the Chronicle newspapers had been delivered to the Chronicle news vendor at the same corner by other than the regular delivery man. There was also the testimony of the regular man, Mr. Lund, who had charge of the sales at the Bayshore dog tracks that he was busy with his regular delivery service on the night in question and that it would have been impossible for the office “to get hold of him" on the phone to ask him to get extras from the plant for distribution if any had been published that night. The fact that plaintiff was on her way home from the dog tracks, having attended the last race, and had already reached Twenty-fourth Street which is about a mile from the dog tracks does not necessarily prove that no attempt was being made by the appellant to reach the dog track patrons. The races did not close at the same time every night and anyone leaving the Chronicle building would not know whether or not the tracks had closed until he reached them. If O’Brien had stopped for reasons of his own on the way to the dog tracks, as intimated by the testimony of Mr. Neish who testified that he first saw O ’Brien’s car pulling out from a parking space at Eighteenth Street and Potrero Avenue at which corner a beer parlor was located, he could have left the Chronicle building with sufficient time to reach the dog tracks before closing time if he had not stopped. It appears from this brief résumé that the explanation that 0 ’Brien was on his way to deliver extras to the Bayshore dog tracks is a reasonable one. Besides the testimony of Mr. Nicolini that he actually saw extras in the rear of O’Brien’s car, saying “something about the stevedores going back to work”, is we think amply sufficient to support the inference that 0 ’Brien was transporting extras to the Bay-shore dog tracks, unless such inference was dispelled by clear, positive evidence, not open to doubt, produced by the appellant. (Engstrom v. Auburn Auto Sales Co., supra.)

The appellant claims to have produced evidence which as a matter of law completely dispels any inference that O’Brien was delivering extras to the Bayshore dog tracks at the time in question. This proof is the testimony of their press foreman, Mr. Wooster, testifying with reference to the pressroom records of the night in question to the effect that the first edition published that night which was an extra and which contained any news with reference to the settlement of the strike, was the COCO edition which bore “Extra" across its face, and in large letters the words ‘1 End of Strike in Sight ’ ’, and that the press for the CCCC edition was not started until 12:04 A. M., which was obviously after the accident had occurred. Both the Chronicle and the Examiner for that evening were late in being delivered to the news vendors at the corner of Twenty-fourth Street and Potrero Avenue, and the Examiner edition which arrived immediately after the accident contained headlines announcing the end of the strike. The appellant admits that the strike had in fact terminated, but alleges that on this particular occasion they were “scooped” by the Examiner, although they offered no explanation for the “scoop” which concerned a matter of great public interest and of which the settlement was no secret. There were also offered in evidence by the appellant the testimony of Mr. McCarty, head of the street sales department of the Chronicle, who had charge at the Fifth Street entrance of the Chronicle building of the delivery of the bundles of newspapers to the delivery men, and whose duty included checking out to the district men under him the bundles of newspapers to be delivered by them to the news vendors. Mr. McCarty’s testimony was to the effect that no notation of any papers being delivered to O’Brien on that night appeared in the little black book which was his own personal record and in which he kept track of the bundles delivered to the district men. He also denied that he ever employed home delivery men for use in the street sales department even in an emergency.

Certainly this testimony, if accepted as true, compels the conclusion that O’Brien was not engaged in delivering strike extras. Obviously, however, the jury did not accept it at its face value, and we cannot say as a matter of law that its rejection was wholly unwarranted. In testifying with reference to the printing of the various editions on that particular night, Wooster testified that the times of printing the various editions were as follows:

C ..................................5:26 to 6:10 p. m.
CC .................................8:06 to 8:40 p. m.
CC* ................................9:27 to 9:40 p. m.
CCC...............................10:25 to 11:15 p. m.
CCCC .............................12:04 to 12:11 p. m.
CCCC* ..............................1:29 to 2:24 a. m.
CCCC** .............................2:30 to 3:58 a. m.

Seven newspapers bearing these edition identification marks were introduced in evidence by the Chronicle as a complete file of all the editions printed that night. It was explained that the “Cs” applied to regular editions and the “C-stars” were editions in which “replates” or pages different from the regular edition were inserted. Wooster admitted that after a certain edition had gone to press and had been partially printed and had then been stopped for new and additional news, the nexvspapers carrying the additional news could bear the same designation with which the edition had started. In other xvords, newspapers containing the identification marks of the same edition might contain different news and headlines. Although the press records referred to in his testimony by Wooster contained no record of a newspaper designated as CCC®, which is the identifying mark which an edition containing strike news prior to the CCCC edition xvould bear, nevertheless, in the CCCC edition introduced in evidence, there appears on an inner page an insert labeled CCC55, ‘which is an indication that the pressroom record for that night was not complete. Likewise, upon cross-examination, in looking at his pressroom record for March 4, 1938, Wooster stated positively that no paper labeled CCCC**®* had been printed, but such a paper bearing this identification mark was produced by the attorney for the respondent. This accumulated exddence was sufficient to show that the records of the press-room, which would ordinarily be assumed to be correct, were not necessarily infallible. Likewise, Wooster admitted that the time of the different editions’ going to press did not in fact necessarily correspond with the edition identification marks which actually appeared on the newspapers themselves. To dispel the inference of employment, it was necessary for the evidence produced by appellant not only to be clear, positive and uncontradicted, but not open to doubt. In this regard, we think the language used by the court in the case of Dierks v. Newsom, 49 Cal. App. 789 [194 Pac. 518], is applicable. The court there said: “The evidence introduced by appellant made out a complete defense if full credence xvas given to it by the trial court; but the court was not bound to thus unreservedly accept it, even if uncontradicted. The court saw and heard the witness testify, and with this advantage, not enjoyed by us, it was for it to determine the degree of credence to be accorded this testimony. It is not essential that the credulity of the court should correspond with the positiveness with which a witness testified.” In view of the positive testimony of Nicolini that the several bundles of newspapers with which O’Brien’s car was loaded at the time of the accident bore the caption “Extra” across their face, and contained news with reference to the stevedores going back to work, in which testimony he was not shaken, considered in conjunction with the showing that the records of the pressroom of the Chronicle with reference to the printing of the various editions were not so definite or infallible as to preclude the possibility of error as to the time the edition bearing the strike news came off the press, we are satisfied that the evidence produced by the appellant does not as a matter of law dispel the inference of employment established by respondent as her prima facie case.

Certain minor points are raised by appellant in which we find no merit. Appellant complains that the trial court erred in giving an instruction to the effect that the jury could find in accordance with an inference which they might reasonably make from circumstantial evidence even though direct evidence to the contrary has been introduced by the defendant. It is not the rule that a jury must accept as true all direct evidence offered in opposition to an inference. If the direct evidence to the contrary is not clear, positive, uneontradicted, and is not. free from doubt, the jury is entitled to reject it. The instruction is, therefore, not subject to criticism.

The appellant also complains of the misconduct of the attorney for the respondent in asking Mr. Gilroy, circulation manager of the Chronicle, if the company did not require O’Brien to carry insurance on his car. The question of whether the witness should answer the question was argued without the presence of the jury, the objection thereto was sustained, and the question was not answered by the witness. It is to be noted that the question was directed only to the ascertainment of whether insurance was carried by O’Brien, against whom the action had been dismissed, and not whether, insurance was carried by the Chronicle Publishing Company. The asking of such question, relative to the insurance carried by a third party, was not such prejudicial error as to warrant a reversal of the judgment.

We find no error in the fact that the attorney for the respondent examined witnesses for appellant as to their diligence in ascertaining the whereabouts of O’Brien. Since essentially only 0 ’Brien knew precisely what he was doing at the time and place of the accident, his testimony was, of course, extremely vital. While there was no legal duty on either party to produce O’Brien, in view of the provisions of subdivision 6 of section 2061 of the Code of Civil Procedure that ‘ ‘ evidence is to be estimated not only by its own intrinsic weight, but also according to the evidence which it is in the power of one side to produce and the other to contradict”, we think it was relevant and material for respondent to inquire whether it was within the power of the appellant to procure the presence of O’Brien at the trial. This was a legitimate field of inquiry.

The judgment is affirmed.

Carter, J., Shenk, J., Gibson, J., and Edmonds, J., concurred.

Rehearing denied.


source: Caselaw Access Project

author: SHENK, J.

license: Public Domain

text:
    [S. F. No. 16438.
    In Bank.
    June 20, 1940.]
    FAYE C. MAMER et al., Petitioners, v. SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent. KATHLEEN WEST et al., Petitioners, v. THE SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent. ANDREW ANDERSON et al., Petitioners, v. THE SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent.

      W. I. Gilbert and Cooley, Crowley & Supple for Petitioners.
    J. H. O’Connor, County Counsel, Jennings & Belcher and Newlin & Ashburn for Respondent.
   SHENK, J.

This is an application for the writ of mandamus to compel the respondent superior court to hear and determine the motions of petitioners to set aside judgments entered against them as plaintiffs in their action against the Lockheed Aircraft Corporation.

Demurrers to second amended complaints were argued and submitted on April 9, 1940. On April 29th, the demurrers were sustained without leave to amend. Actual notice of this ruling was received by the petitioners ’ attorneys in San Francisco on April 30th, whereupon they commenced immediately to prepare notices of motions for leave to file third amended complaints, but before the preparation of the papers was completed judgments were, on May 3d, entered against them. On May 6th, notices of the entry of said judgments were served. On May 15th, the petitioners served and filed with the clerk of the respondent court in each case a notice of motion to set aside the judgment and for leave to file a third amended complaint. On the same day they filed with the clerk of the court a notice and demand in each case for a transcript pursuant to the provisions of section 953a of the Code of Civil Procedure. The pertinent part of each document reads as follows: “You are hereby notified that the plaintiffs above named intend to appeal from the judgment given, made and entered in the above entitled action in said superior court, on or about the 3rd day of May, 1940 ...”

When the motions to set aside the judgments came on for hearing on May 21st, counsel for the defendant interposed an objection on the ground that the court was without jurisdiction to hear or determine the motions for the reason that the aforesaid notice and demand for a transcript constituted a notice of appeal and had the effect of removing jurisdiction from the superior court to the reviewing court. The objection was sustained,—whereupon this proceeding was instituted.

The question is whether the notice and demand for a transcript in the language above quoted is, in effect, a notice of appeal. The petitioners insist that it is not. The respondent contends that by an unbroken line of decisions since the amendment of section 940 of the Code of Civil Procedure in 1921 it has been held by this court and the District Courts of Appeal that a similar notice and demand for a transcript constitutes a notice of appeal.

The position of the respondent must be sustained. Commencing with the ease of Purity Springs Water Co. v. Redwood Ice Delivery, 203 Cal. 286 [263 Pac. 810], this court has consistently held that a notice and demand under section 953a which contains the clause “You will please take notice that plaintiff in the above entitled action desires and intends to appeal from the judgment heretofore given ... ” is sufficient as a notice of appeal. It was also stated in that case, at pages 287 and 288: “It is no objection to a notice of appeal that it is a part of the same paper that directs the clerk to prepare the record and, in recent decisions, considering the precise language above quoted, it has been held that ‘while it would be more satisfactory if the notice had been more explicit, it must be held sufficient to give the appellate court jurisdiction’. (Anderson v. Standard Lumber Co., 60 Cal. App. 445 [213 Pac. 65]; Wright & Hogan, Inc., v. Heide, 72 Cal. App. 16 [236 Pac. 219].)”

The Purity Springs Water Company case was followed with approval in Magruder v. City of Redwood, 203 Cal. 665 [265 Pac. 806], and Kiekhoeffer v. United States Nat. Bank, 2 Cal. (2d) 98 [39 Pac. (2d) 807], where the same language was employed in the notice to the clerk as was before this court in the Purity Springs Water Company ease. To the same effect is Lierly v. McEwen, 81 Cal. App. 676 [254 Pac. 587].

It is true that in each of the cases above cited the language of the notice and demand contained the words “desires and intends to appeal”, while in the proceeding now before us the wording is that the plaintiffs “intend to appeal”. However, in substance and effect they are the same. It would be too much of refinement in an important matter of procedure to say that the words “desires and intends to appeal” constitute a sufficient notice of appeal and vest jurisdiction in the reviewing court, but that the words “intends to appeal” do not have the same effect. In In re Forthmann, 118 Cal. App. 332 [5 Pac. (2d) 472], the District Court of Appeal held that the words “desires or intends to appeal” employed in the notice to the clerk were sufficient to transfer jurisdiction to the reviewing court, notwithstanding the use of the word “or”.

It therefore appears that for over seventeen years, and under the authority of uniform decisions in this court and in the District Courts of Appeal, a notice and demand to the clerk to prepare a transcript under section 953a of the Code of Civil Procedure in substantially the same form as the one here involved has constituted a sufficient notice of appeal.

The case of Phillips v. Byers, 189 Cal. 665 [209 Pac. 557], relied on by the petitioners, is not controlling. It was there held that a notice to the clerk to prepare a transcript under said section 953a was sufficient as a demand for a transcript even though it did not state that the party giving the notice desired or intended to appeal or that he had appealed from the judgment. The sufficiency of the notice as a notice of appeal was not properly involved in that case.

The petitioners have presented an argument possessed of much merit to the effect that from the standpoint of proper and uniform practice any notice of appeal should contain language definitely stating that the party “appeals” from the judgment or order as contemplated by section 940 of the Code of Civil Procedure as amended in 1921. However persuasive the argument of the petitioners may appear to be, we are confronted with a situation where by a long continued practice, approved by our reviewing courts, a notice and demand substantially the same as the one here involved has been considered a sufficient notice of appeal. Undoubtedly there are many appeals pending in this court and in the District Courts of Appeal taken in reliance on the decisions now sought to be overruled and wherein the power of review depends on such a notice as a prerequisite of appellate jurisdiction. If any change is to be made in the rule it is desirable that it be made by the legislature, the effect of which would be prospective, and not by the court in overruling prior decisions, the effect of which would be to jeopardize if not destroy appellate jurisdiction in cases so pending on appeal.

The alternative writ is discharged and the peremptory writ is denied.

Gibson, C. J., Curtis, J., Edmonds, J., Carter, J., Spence, J., pro tem., and Knight, J., pro tern, concurred.


author: EDMONDS, J.

text:
    [S. F. Nos. 14699, 14700.
    In Bank.
    June 27, 1940.]
    CITY OF OAKLAND (a Municipal Corporation), as Trustee, etc., Appellant, v. CALIFORNIA CONSTRUCTION COMPANY (a Corporation), Respondent.

      P. Bert Fernhoff, City Attorney, C. Stanley Wood, City Attorney, and John W. Collier, Deputy City Attorney, for Appellant.
    Humphrey, Searls, Doyle & MacMillan, Morgan J. Doyle, George N. Crocker and Frank V. Campbell for Respondent.
   EDMONDS, J.

The question for decision concerns the right of the City of Oakland to recover the proceeds of a street improvement contract. In each of the two cases which have been consolidated upon appeal, a demurrer was sustained without leave to amend, and the appeals are from the judgments which followed those orders.

In 1928, the respondent, a paving contractor, was awarded two contracts for street work to be done under the provisions of the Improvement Act of 1911. (Stats. 1911, p. 730.) One complaint is based upon the contract for Greenly Drive, the other upon that for Columbian Drive, but except for the particular terms of these contracts, the same facts are pleaded in each case. By separate counts, the city alleges that the contract sued upon is void because a member of the city council which awarded it ivas in the employ of the respondent, the respondent secured it upon false representations, and the work was obtained as the result of a conspiracy among certain paving companies, including the respondent, to control the street work of the City of Oakland by refraining from competitive bidding.

According to the allegations of the complaint, “for a long time prior and subsequent” to the confirmation of the street superintendent’s assessment for the work, Eugene K. Sturgis, a commissioner of the City of Oakland, and as such a member of the city council, was in the employ of the respondent as an attorney. In that capacity he rendered legal services to the respondent with reference to this street proceeding, his compensation being a percentage of the total cost of the work to be performed under the contract. According to the city’s allegations, because of his interest in the assessments levied and bonds issued pursuant thereto, the confirmation of such assessments is void.

In support of its second count, the appellant pleads that, for the purpose of securing the contract, the respondent made false and fraudulent representations to the effect that it would ■ perform the work and furnish the materials according to the specifications, but that it had no intention of doing so. Continuing these charges, the city alleges that during the time the paving was being put in, one of its paving inspectors, who was assigned to inspect the work performed by the respondent, ivas carried upon the contractor’s payroll. As a result of the “fraudulent and corrupt” acts of the respondent and this inspector, and in furtherance of its “fraudulent intention”, it did not perform the work as it had agreed to do. More specifically, the city asserts, the contractor poured too much concrete each day for producing pavement with the proper finish, maintained a force of incompetent workmen and finishers, neglected to mix the concrete properly, used defective material in the gutters, and in various other respects did the work in an improper manner.

As the third cause of action, the appellant alleges that prior to the city’s call for bids certain paving companies, of which the respondent was one, entered into a conspiracy to control the street work in the City of Oakland and inflate prices to be paid by property owners by refraining from competitive bidding. A number of overt acts in furtherance of the claimed conspiracy are pleaded in detail. By reason of this unlawful combination, the city complains, the respondent was the lowest bidder on the proposed improvement and was awarded the contract.

Later, the complaint in the case concerning Greenly Drive (S. F. No. 14699) continues, the superintendent of streets filed an assessment to meet the cost of the improvement, and following its levy the respondent sold and assigned the warrant, diagram and assessment, and the bonds issued thereunder for approximately $27,500, to which amount the city is entitled as trustee for the owners of the property within the assessment district. In the other ease (S. F. No. 14700), the contractor is said to have received approximately $63,000, and judgment is asked in the same form for that amount.

The respondent’s demurrer to each complaint specified, as its grounds, that it does not state facts sufficient to constitute a cause of action; that the court has no jurisdiction of it or the subject of the said action; that the city has not the legal capacity to sue; and that each of the causes of action is barred by the provisions of section 26 of the Improvement Act of 1911, as amended in 1923. (Stats. 1923, p. 117.) The respondent also specifically demurred to the first cause of action upon the ground of uncertainty.

It has long been the law of California that public officers “must not be interested in any contract made by them in their official capacity, or by any body or board of which they are members”. (Pol. Code, sec. 920; Berka v. Woodward, 125 Cal. 119 [57 Pac. 777, 73 Am. St. Rep. 31, 45 L. R. A. 420] ; Stockton P. & S. Co. v. Wheeler, 68 Cal. App. 592 [229 Pac. 1020]; Moody v. Shuffleton, 203 Cal. 100 [262 Pac. 1095].) Contracts in violation of this rule are held void as against public policy, both upon the ground that the interest of the officer interferes with the unbiased discharge of his duty to the public (Nielsen v. Richards, 75 Cal. App. 680 [243 Pac. 697] ; Stockton P. & S. Co. v. Wheeler, supra), and also that a contract in violation of an express statutory provision is void. (Smith v. Bach, 183 Cal. 259 [191 Pac. 14]; Duntley v. Kagarise, 10 Cal. App. (2d) 394 [52 Pac. (2d) 560].)

But the city does not allege that Mr. Sturgis was the respondent’s attorney at the time the contracts were awarded to it. The most specific statement upon this point is that, at the time of the execution of the contract, he was both a member of the city council and an employee of the construction company. It is significant that the city does not charge him with voting to award the contract to the respondent. The facts pleaded do not show that Mr. Sturgis had an interest in the contract at the time it was awarded, and do not state a cause of action upon the ground of his disqualification. The demurrer to this cause of action was, therefore, properly sustained.

Concerning the second cause of action, when one makes a contract upon representations in the nature of inducements to enter into it and there is no misunderstanding as to its nature, the contract is voidable but not void. (Wilson v. Southern Pacific Land Co., 46 Cal. App. 738 [189 Pac. 1040] ; Burns v. Grosvenor Inglis Corp., 120 Cal. App. 688 [8 Pac. (2d) 546]; Williston, “On Contracts”, see. 1488; Restatement of the Law of Contracts, sec. 475.) Under such circumstances, if the contract has been completely executed, as in the present case, the injured party’s remedy is an action for damages.

The ease of Hunter v. County of Santa Barbara, 110 Cal. App. 698 [294 Pac. 1082], relied upon by the appellant, arose when it was found that a contractor had increased his bid to an amount which included a sum estimated to be the difference between the par value and the market value of bonds to be taken in payment for the work. But before the contractor had done any work under the contract, the board of supervisors rescinded it and rejected the contractor’s bid. That is a far different situation from the facts pleaded in the present case. There the contractor sought damages for breach of contract and it was held that he could not recover because the contract was void. Here the work has been completed and the city is suing to recover all of the consideration for the contract upon the ground that because it was not faithfully performed it is void. Upon this cause of action the demurrer was also properly sustained.

The third cause of action presents a different question. Proceedings under the Improvement Act of 1911, supra, include an invitation for sealed proposals or bids upon the proposed work. The purpose of such bidding is to secure a price based upon competition. Any agreement which tends to deprive the government of competition in bidding is unlawful (Swan v. Chorpenning, 20 Cal. 182; McMullen v. Hoffman, 174 U. S. 639 [19 Sup. Ct. 839, 43 L. R. A. 1117]), and where it is shown that the bids made were collusive and a contract is awarded by public officers in ignorance of such a combination, the resulting contract is void as against public policy. (Morgan v. Gove, 206 Cal. 627 [275 Pac. 415, 62 A. L. R. 219]; Dillon on Municipal Corporations, 8th ed., vol. 2, see. 781, p. 1165; McQuillan on Municipal Corporations, 2d ed., vol. 3, sec. 1326, p. 904.) The allegations of the city state a cause of action under these principles.

Upon this point, the respondent contends that any rights the city may have had to sue upon the contracts are barred by the provisions of section 26 of the Improvement Act of 1911 as amended in 1923 (Stats. 1923, p. 117). This section provides that an action “to set aside, cancel, avoid, annul or correct any assessment or reassessment, or to review any of the proceedings, acts, or determinations therein, or to question the validity of, or to enjoin the collection of the said assessments or reassessments, or to enjoin the issuance of bonds to represent the same”, must be.brought within 30 days after the recording of the assessment.

However, the present action is not one within the terms of this provision. The city does not seek to set aside any assessment, or to review any “proceeding, acts or determinations” concerning the method of meeting the improvement’s cost. It does not question the validity of any assessment, but as trustee for the property owners it seeks to reach money alleged to have been collected by the respondent upon a void contract. If successful in its action, no assessment would be changed and no bond would be affected, but the property owners in the assessment district would have the benefit of any money recovered by this city in their behalf.

The point that the City of Oakland has not the legal capacity to sue is also not well taken. The facts of the complaint are substantially the same as those shown in the ease of City of Oakland v. De Guarda, 95 Cal. App. 270 [272 Pac. 779, 273 Pac. 819], where it was held that under the provisions of the Improvement Act of 1911, supra, the city is a trustee for the property owners within the assessment district, and it may maintain an action without the necessity of joining the persons for whose benefit the action is prosecuted. (Sec. 369, Code Civ. Proc.)

The judgment is reversed with directions to the trial court to overrule the demurrer as to the third cause of action and allow the respondent to answer.

Shenk, J., Curtis, J., Gibson, C. J., and Carter, J., concurred.


author: GIBSON, C. J.

text:
    [S. F. No. 15818.
    In Bank.
    June 27, 1940.]
    JULIA F. MORRISON, Appellant, v. THE MUTUAL LIFE INSURANCE OF NEW YORK (a Corporation), Respondent.

      A. Don Duncan for Appellant.
    F. Elred Boland, Knight, Boland & Riordan and R. M. Sims, Jr., for Respondent.
   GIBSON, C. J.

This is an action by plaintiff, the beneficiary under a policy of insurance on the life of her husband, to recover the amount of said policy from defendant insurance company. The company defends on the ground that prior to his death the insured surrendered the matured policy and received its cash surrender value.

Plaintiff Julia F. Morrison and the insured John W. Morrison were married in Leadville, Colorado, in 1893. The marriage continued until the death of John Morrison on May 20, 1932. However, the parties separated in 1918 and lived apart thereafter.

In June, 1904, John Morrison made a written application to defendant company for a policy of life insurance in the sum of $2,000, payable to his wife as beneficiary. The policy, known as a “Twenty Payment Life” was duly issued. It provides that after payment of twenty yearly premiums it would be fully paid up. It contains provisions for cash surrender value and a reservation by the insured of the power to change the beneficiary, as follows: 11 The insured may, from time to time during the continuance of this policy change the beneficiary or beneficiaries by written notice accompanied by this policy, to the Company at its Head Office in New York City. ...”

The policy was formally executed in the New York office of defendant company, and delivered by the soliciting agent in Colorado to plaintiff, the beneficiary. She paid all of the premiums out of her own earnings and kept the policy until December 3, 1918. At this time her husband, apparently without her knowledge or consent, obtained possession of it and never returned it.

In June, 1924, the policy was fully paid up. Some time in April, 1925, John Morrison, the insured, exercised the right of surrender to obtain its cash value from the company. A check in the sum of $1372, representing payment in full of such cash surrender value, was issued to the joint order of the insured and the beneficiary. John Morrison forged his wife's name, indorsed his own and cashed the check, using the proceeds for his own purposes.

In March, 1933, some months after her husband’s death, plaintiff made demand on the company for the proceeds of the policy. After some negotiations the company refused, relying on its prior payment to the insured of the full cash surrender value. The present action followed, in which the lower court made findings against plaintiff on all the material issues, and gave judgment for defendant.

Plaintiff attacks the judgment on two theories: First, that the named beneficiary is under the law the owner of the policy; and second, that she became the owner by virtue of an agreement with her husband.

The first theory is based upon the well-established rule that the naming of the beneficiary in a life insurance policy has the effect of giving that beneficiary a vested right in the policy, so that he becomes in fact the owner of the contract and is protected against any interference with his rights by later acts of the insured or the company. The insured may in such a case neither change the beneficiary nor assign the policy, and he cannot surrender or cancel it. (See Vance on Insurance, 2d ed., pp. 542, 548, 551.) The establishment of this rule made it clear that if the insured wished to retain control over the policy he would have to make special provision in the policy therefor. Accordingly it became customary in many policies to reserve to the insured the power to change the beneficiary, and also other powers, such as the power to pledge the policy to secure loans, to assign it, or to surrender it and obtain the cash surrender value. The most common and the most important reservation, however, is that dealing with change of beneficiary. Where this power is reserved, the question arises as to its effect upon the rights of the beneficiary as owner of the policy.

It is perfectly clear that where the power is reserved, such change may be made, and the beneficiary’s ownership is thereby wholly divested. If in the instant case the insured had exercised his power to change the beneficiary in accordance with the provisions of the policy, the beneficiary’s rights would have been terminated. But the insured did not change the beneficiary, and the question is whether the reserved power to make such change has the effect of destroying what would otherwise be a vested right under the policy. On this point there is some conflict among the authorities. A few courts take the view that the beneficiary remains the owner of the policy with an interest which is vested and absolute until the power of change is exercised. Under this view the unexercised power has no effect upon the beneficiary’s rights, and therefore until the change is made the insured may not assign or surrender the policy. (See, e. g., Roberts v. Northwestern Nat. Life Ins. Co., 143 Ga. 780 [85 S. E. 1043] ; Hill v. Capitol Life Ins. Co., 91 Colo. 300 [14 Pac. (2d) 1006] ; Indiana Nat. Life Ins. Co. v. McGinnis, 180 Ind. 9 [101 N. E. 289, 45 L. R. A. (N. S.) 192].) This view has been strongly criticized on principle, and has been rejected by the great majority of the courts. The modern view is that the insured, by reserving power to change the beneficiary, has retained complete control over the policy, and in consequence the beneficiary has only an expectancy and not a vested right. The actual exercise of the power to change the beneficiary is not important, but is a mere formal requirement for the protection of the company. The company may, as against the insured, insist that this procedural step be taken, but the beneficiary’s right is subject to termination in other ways, whether the formal change is made or not. In short, where the power to change beneficiary is reserved, the beneficiary has an expectancy and will receive the proceeds of the policy if it is in force at the insured’s death with the beneficiary unchanged ; but in the meantime, the insured’s control is absolute, and he may pledge, assign, or surrender the policy at will. (See Antley v. New York Life Ins. Co., 139 S. C. 23 [137 S. E. 199, 60 A. L. R. 184] ; La Londe v. Roman Standard Life Ins. Co., 269 Mich. 330 [257 N. W. 834]; Davis v. Modern Industrial Bank, 279 N. Y. 405 [18 N. E. (2d) 639] ; Vance on Insurance, 2d ed, pp. 561, 562, 568; note, 24 Corn. L. Q. 607.)

These conflicting views have been stated in order that the nature of the problem may be clearly understood. However, it is unnecessary for us to engage in any extended examination of the decisions throughout the country generally. The policy was executed in New York at the head office of the company, and by its terms it is provided that premiums are to be paid at such head office, and that proceeds are likewise to be paid there upon proof of death. The application, expressly made a part of the policy, provides that the proposed contract is subject to the laws of New York. And appellant herself insists that New York law governs. We therefore in accordance with this concession limit our inquiry to the right of the wife-beneficiary under the law of New York.

Plaintiff relies upon the New York Domestic Relations Law, section 52, which provides: “A married woman may, in her own name, or in the name of a third person, with his consent, as her trustee, cause the life of her husband to be insured for a definite period or for the term of his natural life. Where a married woman survives such a period or term she is entitled to receive the insurance money, payable by the terms of the policy, as her separate property. ...” Plaintiff argues that the statute has the effect of establishing the wife’s vested right in the policy as owner and deprives the husband of the power to surrender the policy without her consent. That this is the ordinary effect of the statute seems clear; the beneficiary’s right as owner, particularly under such a statute, is unquestioned. But the beneficiary’s right as owner has also been upheld in the absence of such a statute. And, as pointed out above, the majority view is that the beneficiary’s ownership disappears when the power to change the beneficiary is reserved. In other words, it is not enough to say that the statute gives the beneficiary rights of ownership. The question is whether it gives such rights even where the power to change the beneficiary is reserved in the policy. The statute itself is silent on this point and there are cases holding that the benefits of such a statute do not apply where the policy contains the reserved power. (See Yance on Insurance, 2d ed., p. 561, note 90.)

Both plaintiff and defendant have cited New York decisions in support of their respective positions, and considerable conflict appears in these decisions. This conflict was, however, recognized and resolved by the New York Court of Appeals in the recent case of Davis v. Modern Industrial Bank, supra. A straight life policy was procured by Clarence Davis, the husband, naming his wife, Eleanor Davis, as beneficiary. The policy contained clauses reserving the right to change beneficiary, and the right to assign. The husband assigned the policy to Griffiths as security, without knowledge of the beneficiary. After his death, in an interpleader suit, the insurance company paid the proceeds into court, and the assignee claimed them. It was held that he was entitled thereto. The court reviewed the important American decisions representing the majority and minority views, admitted that the New York cases contain conflicting expressions, and declared that there was no controlling decision on the question. The court then proceeded unequivocally to adopt the majority rule in the following language: “It seems to us that upon principle as well as weight of authority . . . that the insured, having reserved the right to change the beneficiary and assign the policy, did all that the law required him to do to constitute a valid transfer of the proceeds of the policy to the assignee, to the extent of the indebtedness thereby secured, in the absence of objection on the part of the company. . . .

“From an every day, practical standpoint it is desirable to hold that an assignee of a policy containing a clause permitting a change of beneficiary and an assignment of the policy secures a right in the proceeds of the policy superior to the rights of the named beneficiary. If an assignee, in the absence of the consent of the beneficiary, does not obtain such right it will be practically impossible for an insured to borrow on a policy in time of need of financial aid in those cases where compliance with the form prescribed in the policy cannot be followed. No bank or individual would be likely to lend on the security of a policy where the right to enforce the reduction of the security to cash would only mature in case the insured outlived the beneficiary, and where the continued life of the policy depends upon the payment of the annual premium ...”

Plaintiff suggests that the Davis case is distinguishable on two grounds. The first is that it is not a “surrender” case, i. e., that the insured did not surrender the policy and take the cash value, but merely assigned it. It is said that assignment, changing the ownership but leaving the policy intact, is less drastic than surrender, or cancellation of the contract. This may be true as a description of the transaction, but the distinction has no relevancy here. The power of the insured to assign for value and to surrender are similar in one important respect: each represents a beneficial use of the value or proceeds of the policy by the insured, and each terminates the right of the beneficiary to such value or proceeds. It is immaterial, so far as the beneficiary is concerned, whether the policy remains in existence (assignment) or is cancelled (surrender). Since he receives nothing in either case, it makes no difference to him who does. In short, the basic question is whether the beneficiary has a vested right in the policy which cannot be defeated by act of the insured. If it cannot be defeated, neither assignment nor surrender is valid; if it can, both are valid. The Davis case, holding that the beneficiary under a policy reserving power to change has no vested right, is therefore in point on the issue of this case.

The second asserted ground of distinction is that in the Davis ease there was no claim that the beneficiary paid the premiums or was named as beneficiary pursuant to a contract. These are, of course, important factors, but they relate to the other issue of this ease to be discussed hereinafter. On the first issue, whether the beneficiary has a vested right under New York law merely by reason of being named as such in the policy, the Davis ease is conclusive.

We now come to a consideration of the second main contention of plaintiff, that she became the owner of the policy by virtue of a contract with her husband. Her testimony was that she urged her husband to procure insurance; that he refused but declared that if she wished to pay the premiums he would make the application, and said “it is your insurance.” Plaintiff then had Mr. Johnson, the soliciting agent, call at her home where she described the situation to him, and it was determined that insurance should be obtained. She paid the first premium out of her earnings from her rooming and boarding house. Some time later she received the policy from the soliciting agent and placed it in a locked drawer. She continued to pay premiums from personal funds and all receipts from the company were mailed to her personally. After 1918 when she had moved to San Francisco, she made payments at the local office personally, and the receipts were handed to her. This evidence was not disputed, and it shows that as between plaintiff and her husband, she was not simply the named beneficiary in the policy, but the actual owner thereof, despite the clause reserving power to change the beneficiary. If she had sued the insurance company before the proceeds had been paid, and plaintiff and the insured were contending between themselves for the proceeds of the policy, under the evidence just recited plaintiff would be entitled to those proceeds and could prevent the insured from surrendering the policy. In other words, once the true ownership of the policy is brought home to the insurance company, whether that ownership is established by taking out the policy in the name of the owner, or by assignment, or by contract or gift, the company is bound to recognize the rights of the lawful owner.

But in the instant case the company has already paid out the money to the named insured. It is immune from liability on another claim bjr plaintiff if at the time it paid the money to the insured it was not already obligated to the plaintiff. The question is whether at the time the company paid the proceeds to the insured, it had such knowledge or notice of plaintiff's ownership of the policy as to require a recognition of plaintiff’s rights. It is conceded by defendant company that if there was such a contract making plaintiff the owner of the policy, adequate and proper notice thereof would be binding upon it. On this question the findings of the court are against plaintiff, and plaintiff’s contention is that the evidence, including some excluded by the court, demonstrates the error of these findings.

The testimony reviewed above is not, in our opinion, sufficient to establish knowledge on the part of the company. It is possible that plaintiff might have paid the premiums voluntarily without contract, or that she might have paid them out of funds of the husband. The mere fact of receipt of the premiums from her cannot establish knowledge on the part of the company that she was the owner of the policy. Nor can the company be charged with notice of ownership of the policy in conflict with its provisions merely by reason of the casual discussion with the original soliciting agent.

The remaining testimony is, however, much more significant. It consists of three conversations, in which plaintiff and agents of defendant company allegedly participated, which conversations were excluded by the trial court on two grounds hereinafter discussed. In June, 1924, just before the policy matured, John Morrison came to San Francisco and wanted to cash in the policy, but plaintiff refused. Upon its maturity they went to the San Francisco office of the company to inquire as to their options under the policy. There then followed the conversations which plaintiff offered to prove and which the trial court excluded. The formal offer of proof recited that she called at the office of the company with her husband, and they had a conversation with two men purporting to represent the company as agents in charge of its business in San Francisco. Mr. Morrison stated that he wanted the proceeds paid to him and the policy surrendered, but plaintiff stated that she would not permit this because the policy was hers; that she had paid the premiums and she wanted it to remain as paid-up insurance. One of the defendant’s representatives then gave an explanation to plaintiff and her husband of the options in the policy and its value as paid-up insurance. Plaintiff notified them that this was the way she wanted the policy to remain. Plaintiff went back the next day and had a further conversation with the same man who assured her that her husband could not get the money without her signature. As to each conversation, plaintiff’s testimony was that she asked for the “head man” and spoke with “two of the head men” from “one of the offices”, in a private office behind the counter.

This was the offer of proof which the court rejected on three grounds. One ground was that the proffered evidence was inconsistent with the provisions of the policy, and an attempt to show rights in a manner not permitted by the provisions of the agreement. This objection is untenable. Despite the provisions of the policy specifying the manner in which ownership of the policy may be established, and the general provision that no agent has authority to make representations or waive any provisions of the policy, properly authorized agents of the company, or agents with apparent authority, may charge the company with notice. (See generally, Vance on Insurance, 2d ed., pp. 431, 445; 2 Couch, Cyclopedia of Insurance Law, p. 1648.) And in the present case, if the responsible officers in charge of the company’s San Francisco office, after being informed of the facts surrounding the issuance and maturity of this policy, and being requested to clarify the rights of the parties thereunder, stated on behalf of the company that the insured could not surrender the policy without the consent of plaintiff beneficiary, and plaintiff thereafter relied upon such statement, the company is certainly estopped to deny those representations as to plaintiff’s rights under the policy. Had it not been for these assurances, plaintiff might at that time have taken the necessary steps to regain possession of the policy, or to establish her rights thereunder. In short, the matters set forth in the offer of proof, unless controverted, were sufficient to raise an estoppel. (See Vance, supra, p. 534; 2 Couch, Cyclopedia of Insurance Law, p. 1508.)

But this assumes that the offer of proof did show representations by responsible agents of defendant, and that raises the second objection, relating to the identification of the parties concerned. Plaintiff did not name any specific person and the question is whether her description of her call at the office and her conversations in the inner office with the “head men” was a sufficient identification. In our opinion the offer was sufficient, prima facie, for the introduction of the testimony. There is no reason why plaintiff should be compelled to ascertain the names of those persons; that is but one method of identification. There is nothing fatally uncertain in the description of the individuals or of her conversations. If she could only say that she spoke to someone in the office, that someone might be a stenographer or clerk, not competent to bind the company. But she pointed out that she asked for those in charge, and that she was conducted to an inner office where those purporting to have authority to speak for the company, stated to her what her rights would be. In the absence of any contradiction by the defendant company, this identification should be sufficient.

The remaining objection is the failure to prove that these individuals had authority to receive notice on behalf of the company which would lead to a waiver or modification of the terms of the policy. Plaintiff was not in a position to prove actual authority, but her testimony was, in our opinion, sufficient to make out a prima facie case of apparent authority. She asked for, and was directed to the “head man”, that is, those in responsible charge of the San Francisco office of defendant company. This was the office at which she had paid her premiums and received receipts therefor for many years. This was where she obtained her dividends. This was, indeed, the office at which the insured filed his request for the surrender of the policy.

It follows that the court erred in sustaining objections to tins line of testimony, and since the testimony, if uncontradicted, would tend to establish plaintiff’s right to recover, the sustaining of the objection was reversible error. The judgment should therefore be reversed in order that plaintiff may be permitted to give the rejected testimony on this issue of notice to the company of her rights. It will then be possible for defendant to impeach or contradict this evidence by any means available.

Under the view we take of the case, the defenses of laches and estoppel set up by defendant are without substance. Defendant contends that plaintiff had knowledge of her husband’s assertion of sole ownership of the policy many years before her suit, and failed to take any action to establish her interests. But if her testimony is believed, she did take affirmative action by presenting her case to the representatives of defendant company in San Francisco, and she relied upon their assurances that she was fully protected.

The judgment is reversed.

Curtis, J., Shenk, J., and Knight, J., pro tern., concurred.

Edmonds, J., concurred in the judgment.

Carter, J., deeming himself disqualified, did not participate in the consideration or decision of the foregoing opinion.

Rehearing denied. Carter, J., deeming himself disqualified, did not participate in the ruling.