text:
    [L. A. No. 14360.
    In Bank.
    October 22, 1934.]
    FLOYD S. SISK, as Trustee in Bankruptcy, etc., et al., Appellants, v. CALIFORNIA NATIONAL BANK OF LONG BEACH (a National Banking Association) et al., Respondents.
    Newlin & Ashburn, A. W. Brunton and Koenig & Brunton for Appellants.
    Dana R. Weller and C. F. Culver for Respondents.
   SHENK, J.

Appeal from a judgment for the defendant Barnes. The action was brought to recover the sum of $7,906.02 on deposit with the defendant bank, and levied upon under execution to satisfy partially a judgment of the plaintiff Spencer against the defendant Barnes.

Prior to 1909 Spencer and Barnes were copartners in the sale of certain mining properties. Barnes sold the properties and collected the proceeds. Spencer engaged Messrs. Andrew M. Strong and Lewis B. Works as his attorneys to prosecute his claim against Barnes for an accounting and a share of the proceeds of the sale, under a written agreement to pay his attorneys forty per cent of any recovery. In an action commenced in 1909 in the Superior Court in Los Angeles County, in which an amended complaint was filed by said attorneys in 1912, the plaintiff recovered a judgment for $69,325 against Barnes. Suit on the judgment was brought in the state of Oregon under an agreement with Oregon attorneys, Messrs. Oscar Hayter, W. T. Slater, and P. M. Etheridge, to pay them fifty-five per cent of any amounts recovered in Oregon. There is evidence indicating that there was also an oral agreement by Spencer to pay the California attorneys an additional fifteen per cent of the amounts recovered on the California judgment. The California and Oregon attorneys agreed among themselves respecting a division of their percentages of any proceeds from both judgments. At various times moneys aggregating some $9,000 were collected pursuant to levies of execution and divided forty-five per cent to Spencer and fifty-five per cent to the attorneys. ‘

In December, 1926, in California, an execution was issued and levied upon a credit of $7,906.02 in the name of Legene S. Barnes with the defendant California National Bank of Long Beach. The defendant Elbe Oil Land Development Company claimed the fund. In April, 1928, the present action was commenced by Spencer, represented by Newlin & Ashburn and Arthur T. George, as his attorneys, against Barnes, the bank, and the development company, to determine the ownership of the fund. While the action was pending and on June 19, 1930, Spencer settled the claim against Barnes for the sum of $20,000. In the settlement Spencer was represented by F. D. B. Moote, and Barnes by G. M. Spicer. Spencer executed and delivered to Grace D. Barnes, wife of the defendant Barnes, an assignment of the California judgment. Mrs. Barnes executed a satisfaction of said judgment which was filed and entered the next day.

Subsequently on motion the five California and Oregon attorneys, or their representatives, who claimed an interest in said judgment and in the fund held under the garnishment, were substituted as parties plaintiff in the action and filed a supplemental complaint. On the trial the Elbe Oil Land Development Company disclaimed any interest in the fund. The issues framed by the supplemental complaint and answer thereto left for determination the main question in this case, viz., whether there existed an assignment by Spencer to the substituted plaintiffs of fifty-five per cent of the California judgment and whether the defendant Barnes and his wife had such notice or knowledge of any assignment as to prevent the effect of the satisfaction of the judgment in so far as the interest of the substituted plaintiffs was concerned.

The trial court found that Spencer did not assign any part of the California judgment to any of the substituted plaintiffs, and that the latter had no right, title or interest therein or in the fund, and rendered judgment for the defendant Barnes. The principal assignment of error on this appeal by the substituted plaintiffs is that there is no support in the evidence for that finding.

The appellants predicate their ownership of fifty-five per cent of the judgment and their right to recover in this action on an alleged written assignment to the California attorneys of forty per cent of the California judgment in 1912, when the judgment was rendered, and an additional fifteen per cent in 1913 when the Oregon action was commenced, and of which the defendant Barnes, Mrs. Barnes and their attorney Spicer had knowledge. No such assignment was ever recorded and no written assignment was produced; but proof of the circumstances of its alleged loss was furnished. There is nothing in the findings of the trial court to negative the existence of an understanding between Spencer, on the one hand, and the attorneys on the other, that the latter were to have fifty-five per cent of any amounts recovered on the California judgment, as well as on the Oregon judgment. There is evidence in the reeord, however, to support the conclusion of the trial court, furnished by the testimony of both the plaintiff Spencer and the appellants, that the only written agreement between the parties was the agreement made before or about the time the amended complaint was filed, which fixed a contingent fee of forty per cent of any recovery. The plaintiff testified that such a written agreement or “assignment” was made. Also, in a written statement made by Lewis R. Works and received in evidence he said: “I remember that Mr. Strong and Mr. Spencer came together to me to enlist my services in the trial of the case. After a conversation between us it was agreed that Mr. Spencer should make writtén assignment to Mr. Strong and myself of a certain percentage of any judgment to be procured, the amount of which percentage I do not now remember. My recollection is that I was told, but do not know when, that this assignment had been executed, but I do not recollect ever having seen it and it is possible, and in fact probable, that I never did see it. If it was ever in my possession it was turned over in 1913, when I went on the superior bench, to my then partner. ...” In view of this testimony and the inferences and deductions which the trial court could reasonably draw from the whole evidence, we may not declare that the finding that there was no assignment of an interest in the judgment is without support in the record.

It •is contended that nevertheless the trial court should have found that an equitable assignment was created which operated to effect a transfer to Mrs. Barnes only of Spencer’s forty-five per cent share. In this respect reliance is placed on the proof of the lost written agreement for a contingent fee of forty per cent, the oral understanding for the additional fifteen per cent, the conduct of the plaintiff based thereon, together with sufficient evidence, so it is claimed, in the record that the understanding respecting the '55-45 per cent division of the proceeds of the judgment was known at least to defendant Barnes and Attorney Spicer, who acted for both Mr. and Mrs. Barnes in the settlement, assignment, and satisfaction of the judgment.

That an equitable prior assignment may be created under such circumstances that to deny its existence would. be to permit a fraud to be perpetrated by the subsequent assignee upon the persons claiming under the equitable assignment is, perhaps, not open to question. Reliance is placed upon La Fetra v. Hudson Trust Co., 203 App. Div. 729 [197 N. Y. Supp. 332], as a case involving circumstances similar to those presented here and for that reason an authority that in tiie present case an equitable assignment existed of Avhich the defendant Barnes and Mrs. Barnes had notice. In that case the plaintiff had prosecuted to judgment a claim in behalf of one Springer, under a contract of employment pursuant to which the plaintiff attorney was to receive forty per cent of the recovery. In a certain loan transaction between Springer and the defendant in that action, the latter demanded additional security. Springer offered to put up an assignment of the judgment, but stipulated with Levds, the defendant’s treasurer, that he was the owner of but sixty per cent of the judgment and that the plaintiff was the owner of the remaining forty per, cent, and he could therefore assign but the sixty per cent interest owned by him. Lewis, however, in order to make a showing to the directors of the bank, insisted on a transfer of the whole judgment in form, on the assumption that there would be sufficient security without applying the assignment, or at least the plaintiff’s interest in the judgment, to the satisfaction of the debt. Lewis himself then so prepared the assignment and had Springer execute it. The defendant in that case applied the whole of the proceeds of the judgment to Springer’s indebtedness to it. The trial court directed a verdict for the defendant. On appeal the judgment entered on that verdict was reversed and judgment directed for the plaintiff on the ground of the existence of an equitable assignment to the plaintiff of which the defendant had notice. What was stressed in that case as giving basis to the conclusion that an equitable assignment existed which was binding on the defendant was not so much the fact of the understanding between the attorney and his client, which standing alone constituted no transfer of any interest in or, under the facts of that case, any lien on the judgment, but the fact that the client had informed the defendant that he had “assigned” forty per cent of the judgment to the attorney, and himself owned but sixty per cent which was available as collateral security.

There is no comparable evidence in the case before us. It may be assumed that the defendant Barnes supposed that some understanding existed as between Spencer and the appellants, based on a contingent fee arrangement, for a division of the proceeds of the judgment, but this is far different from saying that the defendant’s knowledge was that an assignment of a partial interest in the judgment existed. Without some further notice to the defendant, such as existed in the ease of La Fetra v. Hudson Trust Co., supra, or in the case of McGown v. Dalzell, 72 Cal. App. 197 [236 Pac. 941], of facts showing an intent to transfer an interest in the judgment to the appellants, there is nothing in the defendant’s supposed knowledge of an arrangement for a contingent fee based on a percentage necessarily to inhibit his activities to obtain a settlement and satisfaction of the judgment and thus a release of the garnishment. (Mansfield v. Dorland, 2 Cal. 507; Gage v. Atwater, 136 Cal. 170 [68 Pac. 581]; 3 Cal. Jur., p. 682.) It may be argued and it may be assumed that notice of only such facts as actually existed would not have affected the final result in the La Petra case. But it must be remembered that the present ease is not an action against a third person having knowledge of the facts, to whom the proceeds of the judgment were paid, for a partial recovery thereof. Here the attempt is to bind the judgment debtor, after the judgment has been settled and satisfied, to respond to the appellants’ claim of an interest in the judgment. The question of the defendant’s knowledge was primarily one for the trial court. The record shows that the trial court was justified in concluding inferentially either that Barnes had no actual knowledge of the arrangement between Spencer and his attorneys, or that the knowledge possessed by him, in the absence of any notice or knowledge of an actual assignment to the appellants of an interest in the judgment, would serve only to give rise to a belief that the extent of the appellants’ rights was to a percentage of the proceeds of the settlement in the hands of Spencer. The fact of the assignment of the judgment by Spencer to Mrs. Barnes is not sufficient to affect the conclusion in that respect. We cannot say on the whole record that the court erred in failing to find that an equitable assignment existed so as to prevent the full operation of the satisfaction of the judgment in this case and permit a recovery against the judgment debtor Barnes.

Other questions presented do not require discussion. We perceive no prejudicial error in any of the rulings of the trial court.

The judgment is affirmed.

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

Rehearing denied.


source: Caselaw Access Project

author: WASTE, C. J.

license: Public Domain

text:
    [Crim. No. 3744.
    In Bank.
    October 25, 1934.]
    THE PEOPLE, Respondent, v. EDWARD ANDERSON, Appellant.

      Gerald J. Kenny, Public Defender, and James A. Toner, Assistant Public Defender, for Appellant.
    U. S. Webb, Attorney-General, and Seibert L. Sefton, Deputy Attorney-General, for Respondent.
   WASTE, C. J.

In an indictment containing two counts the defendant was charged with murder and robbery. Upon his arraignment he entered a plea of not guilty to each charge. The jury found him guilty on both counts. The verdict on the murder count fixed the degree as of the first and was returned without recommendation. It therefore carries with it the extreme penalty. Defendant has appealed from the judgment and from the order denying his motion for a new trial.

The evidence shows that during the months of November and December, 1933, the defendant engaged in a series of robberies in the city and county of San Francisco, in each of which robberies a gun was employed. Three of these offenses preceded the homicide and robbery, of which defendant stands convicted. On the evening of November 28, 1933, between the hours of 6 and 8 o’clock, the defendant approached the ticket office of the Curran theater with the intent, as he freely admitted while on the stand in his own defense, of perpetrating a robbery. When approximately two feet from the ticket office he drew an automatic revolver from its place of concealment in his clothes. He testified that the gun was discharged as he “was just going to put it up in the cage”; that he had “just cleared the gun over the railing when it went off”. In explanation of the firing of the gun he testified: “I suppose I must have pulled the trigger; I don’t remember . . . how it happened.” As a result of the discharge of the weapon the deceased, who was in the ticket office, was shot through the chest. He died from the wound and the resulting hemorrhage. Defendant immediately fled the scene of the shooting in a taxicab. He proceeded directly to the Koffee Kup restaurant, where he held up the cashier and robbed the cash register of approximately sixty dollars. He stands convicted of this offense as well as of the homicide growing out of the attempt to rob the Curran threater. Within the next succeeding twenty days he perpetrated three other robberies. He was apprehended on December 18, 1933, after a bank robbery and was subdued and captured following a gun duel with the police, in which one officer was shot. While on the stand he admitted, without objection, these several offenses.

The law is well settled that a homicide committed in the perpetration of robbery or in an attempt to perpetrate robbery is murder in the first degree. (Pen. Code, see. 189.) In such cases the law conclusively presumes premeditation and the legislature has declared that they shall be deemed and held to be murder in the first degree. (People v. Murphy, 221 Cal. 37 [32 Pac. (2d) 635].)

Defendant seeks to exclude his case from the effect of this rule by urging that the evidence is insufficient to establish that the homicide was committed in an attempt to perpetrate robbery. He contends that at best the evidence discloses a mere intent to commit robbery and falls short of showing an attempted robbery.

An attempt to commit a crime consists of two elements, viz., the intent to commit it, and a direct, ineffectual act done toward its commission. In other words, there must be a unity of intent and overt act. (16 C. J. 113, see. 92; 8 R. C. L. 277, sec. 294.) There is, of course, a difference between the preparation antecedent to the commission of an offense and the actual attempt to commit it. The preparation consists in devising or arranging the means or measures necessary for the commission of the offense. The attempt is the direct movement toward the commission after preparations are made and must be manifested by acts which would end in the consummation of the particular offense unless frustrated by extraneous circumstances. (People v. Stites, 75 Cal. 570, 575, 576 [17 Pac. 693]; People v. Mann, 1.13 Cal. 76 [45 Pac. 182].) Whenever the design of a person to commit crime is clearly shown, slight acts in furtherance of the design will constitute an attempt. (Stokes v. State, 92 Miss. 415, 428 [46 So. 627, 21 L. R. A. (N. S.) 898].) People v. Moran, 18 Cal. App. 209, 211 [122 Pac. 969], presented a ease of an attempt to commit robbery wherein it was held that the pushing open of the door of a building and partial entry through the same were overt acts that went beyond mere acts of preparation.

In view of the authorities we cannot agree with the' defendant in the conclusion that the evidence fails to disclose any overt act reasonably directed toward the consummation of the intended robbery. Defendant’s conduct in concealing the gun on his person and going to the general vicinity of the Curran theater with intent to commit robbery may, for present purposes, be classified as mere acts of preparation but when he “walked in there [Curran Theater entrance] about two feet from the grill” and “pulled out the gun” and “was just going to put it up in the cage when it went off”, we are satisfied that his conduct passed far beyond the preparatory stage and constituted direct and positive overt acts that would have reasonably tended toward the perpetration of the robbery had the gun not exploded, for one reason or another, and frustrated the plan to consummate the offense. We see no escape from the conclusion that defendant’s conduct constituted an attempt to commit robbery. This being so, the homicide perpetrated in connection therewith, whether intended or not, is murder in the first degree under the authorities cited above.

We find no error in the order denying defendant a new trial. Such a motion is addressed to the sound discretion of the trial court. The alleged newly discovered evidence tending to disclose that the series of robberies mentioned above had been planned by defendant in league with a confederate, the latter sharing in the spoils, does not in any manner mitigate the offenses of which defendant stands convicted. Moreover, substantially the same evidence was offered by the defendant while on the stand. He testified that a named person had purchased the gun and cartridges, had designated certain places to be robbed and had shared in the spoils of such robberies.

The judgment and order denying a new trial are, and each is, hereby affirmed.

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

Rehearing denied.


author: PRESTON, J.

text:
    [Sac. No. 4780.
    In Bank.
    October 29, 1934.]
    MANUEL LEWIS et al., Appellants, v. PACIFIC STATES SAVINGS AND LOAN COMPANY (a Corporation) et al., Respondents.

      Sheridan Downey and Morgan V. Spicer for Appellants.
    Orricb, Palmer & Dahlquist for Respondents.
   PRESTON, J.

This appeal involves the construction of certain provisions of sections 1, 2 and 3 of the so-called Usury Act (Stats. 1919, p. lxxxiii; Act No. 3757, pp. 1908 et seq., Deering’s Gen. Laws).

On September 7, 1928, plaintiffs executed to defendant Pacific States Savings and Loan Company of Stockton, California, their promissory note in the principal sum of $172,000, with interest thereon at seven per cent per annum, principal and interest payable as follows: $1604.76 on October 20, 1928, and the same amount monthly thereafter for a period of five years, to wit: until September 20, 1933', at which time the balance of the principal, to wit: $129,000, was to be due and payable. Unpaid principal and interest, when not paid according to the agreement, were to draw interest at the rate of ten per cent per annum. It was further provided that failure for a period of ten days to pay any installment of principal and interest in full authorized the payee, at its option, to declare the whole obligation due and payable. The note was secured by deed of trust of even date naming Pacific States Auxiliary Corporation as trustee. To further secure said obligation plaintiffs executed, on said date, to said loan company, a chattel mortgage on the contents of the apartment house located on said property mentioned in the deed of trust. As still further security, plaintiffs, on said date, assigned to said loan company the rents due and thereafter to become due them as owners of said property.

Plaintiffs made the payments provided for for some twenty-six months, to wit: until November 20, 1930. They thereafter defaulted, failing also to discharge the second installment of taxes for the fiscal year 1929-1930 as well as the first installment for the year 1930-1931, both of which items were liquidated by the loan company. On December 18, 1930, said loan company caused the trustee to duly record a notice of breach and election to sell under the deed of trust, whereupon plaintiffs instituted this action to enjoin a sale under said deed of trust on the ground that they were not in default, praying that said transaction be declared usurious; that a penalty in treble the amount of all interest paid be imposed; also that the maturity date of the entire principal be postponed until the end of the period of forbearance without interest.

The issues thus tendered were met by a sufficient answer and at the same time a cross-complaint was interposed by defendants, seeking a foreclosure of the aforesaid chattel mortgage as well as the impounding of the rents yielded by said property. The cause came on for trial and the court made findings and gave judgment granting a measure of relief to plaintiffs, consisting of the following: A provision enjoining the sale under said deed of trust on the ground that the notice of breach and election to sell, recorded December 18, 1930, was prematurely given and made; also fixing the then total amount due from plaintiffs to defendant loan company at the sum of $169,279.54, but likewise decreeing that plaintiffs were in default at that time and further decreeing a foreclosure of the chattel mortgage and the impounding of the rents, and for a deficiency judgment in the event of failure to realize the full amount due from said sale and from said rents.

Plaintiffs appealed. All questions raised by them center around two contentions: (1) That partial relief only was granted to them under their claim of usury; (2) that a foreclosure of the chattel mortgage and other relief granted upon the cross-complaint was unwarranted. We shall now consider these contentions:

The court found that the loan company at the time of granting the loan deducted from the principal and retained to itself a so-called amortization service charge of $9,030; also an item of $1800, designated as for notarial, escrow and recording fees and expenses for examination and appraisement of the property and buildings and kindred items. The court declared the whole first item and $1600 of the second item to be in reality interest exacted without written provision therefor in the contract, hence a violation of section 1 of said Usury Act. These items were therefore disallowed and deducted, with interest, from the principal. This action was clearly proper and of it plaintiffs do not complain.

But plaintiffs do complain of failure of the court to find that inasmuch as these excluded items themselves bore interest, the loan company had exacted interest upon interest in violation of sections 2 and 3 of the Usury -Law and thereby incurred the penalty of treble damages. In other words, while conceding that the interest exacted, under whatsoever form, did not, in the aggregate, exceed the limit of twelve per cent per annum, over the period of forbearance, yet, by taking interest upon the disallowed items, defendants collected compound interest and thus became liable for the treble penalty. In this contention plaintiffs are clearly in error.

So much of section 2 as is here pertinent reads as follows: “No . . . company . . . shall directly or indirectly take or receive in money ... or in any other manner whatsoever, any greater sum or any greater value for the loan or forbearance of money . . . than at the rate of twelve dollars upon one hundred dollars for one year; and in the computation of interest upon any . . . note, or other instrument or agreement, . . . interest shall not be compounded, nor shall the interest thereon be construed to bear interest unless an agreement to that effect is clearly expressed in writing and signed by the party to be charged therewith. Any agreement ... in conflict with . . . this section shall be null and void as to any agreement ... to pay interest and no action at law to recover interest in any sum shall be maintained and the debt cannot be declared due until the full period of time it was contracted for has elapsed.”

We have already seen that giving full effect to the contentions of appellants, the limit of twelve per cent per annum for the period of forbearance is not overreached. Besides, the promissory note itself provides for the payment of interest at the rate of ten per cent per annum upon all installments or portions thereof remaining unpaid at any maturity date. This would seem to be the compound interest or interest upon interest referred to by the act. The fact that the condemned items remain a part of the principal as shown by the face of the obligation, and draw interest, does not bring the transaction under the penalties prescribed by sections 2 and 3 of said act. This interest upon interest is taken into consideration when testing the transaction for usury, as announced in the case of Haines v. Commercial Mortgage Co., 200 Cal. 609, 625 [254 Pac. 956, 255 Pac. 805, 53 A. L. R. 725]. See, also, Smith v. Parsons, 55 Minn. 520 [57 N. W. 311], Hutchinson v. Herrick, 58 Minn. 473 [59 N. W. 1103], Gold-Stabeck Loan etc. Co. v. Kinney, 33 N. D. 495 [157 N. W. 482], and 66 C. J., sec. 148, pp. 220, 221.

The above authorities declare a rule stated in the case of Smith v. Parsons, supra, as follows: “When the agreement exacts from the borrower a ‘bonus’ to be paid to the lender for making the loan, that, on the question of usury, must be taken out as of the date when it is to be paid by the terms of the agreement. If payable at the time of advancing the loan, it is, for the purpose of determining what rate of interest the agreement reserves to the borrower, to be deducted as of that date from the amount of loan nominally agreed on, and the computation of interest made on the remainder.”

Making the illustration concrete, in the instant case the calculation, based on a yearly and not a monthly payment of interest, would be roughly: interest upon the principal of $161,370 ($172,000 less the condemned items of $9,030 and $1600), at twelve per cent per annum for a period of five years, would be $96,822, which, added to said principal, makes a total sum of $258,192. However, calculating interest as called for upon the face of the note ($172,000 at seven per cent for five years, or $60,200) and adding such amount to said gross principal, $172,000, we reach a total of $232,000. Now compare these two totals. If the latter exceeded the former, the transaction would be usurious; if not, there would be no usury. On this basis usury was absent in the transaction before us and such method of calculation thus answers the objections urged by appellants.

The District Court of Appeal, in the case of Finley v. Wyatt, 113 Cal. App. 233 [298 Pac. 80], construed the said sections of the Usury Act in harmony with the rule here promulgated.

But little need be said as to the propriety of foreclosure of the chattel mortgage and impounding of the rents under the cross-complaint in this action. This was clearly allowable under section 442 of the Code of Civil Procedure. Certain installments were due; plaintiffs were in default. Said instruments were independent security for the obligation of plaintiffs and provided for the relief granted. The causes of action alleged in the cross-complaint certainly grew out of the contract sued upon and no possible reason can exist for denying defendants the right to set up such matters by said pleading, with a prayer for such relief as said instruments authorize.

The judgment is affirmed.

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


author: THE COURT.

text:
    [S. F. No. 14890.
    In Bank.
    October 29, 1934.]
    SAM SNYDER et al., Appellants, v. WESTERN LOAN & BUILDING COMPANY (a Corporation) et al., Respondents.

      Gerald F. Harrington and W. L. Claiborne for Appellants.
    Donahue, Hynes & Hamlin for Respondents.
   THE COURT.

This cause was taken over upon petition for rehearing. In our former decision (Cal.) [29 Pac. (2d) 172] we held that a trust deed may legally include a provision authorizing the beneficiary to take possession and collect the rents and profits immediately upon default of the trustor. With that conclusion we are presently satisfied. However, in said decision we also held that none of the provisions of the trust deed here involved authorized the beneficiary to pursue such a course. We granted the rehearing solely on the latter point and upon further consideration conclude that the trust deed contains provisions sufficiently definite and comprehensive in their language to authorize the taking of possession and the collection of rents by the beneficiary.

With this introductory statement, we adopt the following portions' of our former opinion, with such additions as will hereinafter appear, as and for our decision in the cause:

“Appeal by the plaintiffs from a judgment partially in their favor.

“The plaintiffs sought an accounting and a recovery from Western Loan & Building Company, which will be referred to as the defendant, of sums of money alleged to have been collected by them while their were in possession of certain real property owned by the plaintiffs.

“One Henry G. Hill and his wife owned two separate parcels of land in Oakland. One was improved by an apartment building and the other by garages for the use of tenants of the apartment house. On July 8, 1930, the Hills executed a note and deed of trust on the apartment-house property alone with the defendant as beneficiary to secure a loan of $55,000. The trust deed was duly recorded. As a part of the same transaction the Hills also executed a conditional assignment of rents which was not recorded. The latter instrument provided for an assignment of all the rents from the apartment house to the defendant Western Loan & Building Company as further security for the debt. It also vested the defendant with power to appoint an agent to take possession, manage the premises, and collect the rents for the purposes of the assignment.

“On March 16, 1931, pursuant to an exchange agreement, the Hills deeded all of the real property mentioned to the plaintiffs in exchange for real property in Utah. The deed of the Hills to the plaintiffs was duly recorded. Hill continued to operate the apartment house and garages for the plaintiffs, who resided in Coalinga, California, and to make payments under the deed of trust to the defendant. About or prior to July, 1932, the plaintiffs defaulted under the trust deed and on August 1, 1932, the defendant took possession of the apartment house by appointing Hill’s manager its agent for the purpose. From that time the defendant collected the rents from the apartment house and the garages and applied them to the indebtedness under the trust deed. On November 25, 1932, the apartment house was sold pursuant to the deed of trust. The defendant made no application for a receiver, nor was one appointed.

“The present action was commenced in August, 1932, to enjoin the defendant from exercising acts of possession, for an accounting and other relief. The trial court found that the defendant was in possession and was entitled to the possession of, and the rents from, the apartment-house property by virtue of the provisions of the deed of trust. The court also found that since August 1, 1932, the defendant had collected the sum of $210 as garage rentals to which it was not entitled. No finding was made as to the amounts received and collected as rentals of apartments, nor the amounts disbursed in the management thereof. On February 14, 1933, judgment for the plaintiffs was entered for the sum of '$210.

“The ground of the plaintiffs’ appeal is that the trial court erred in finding that the defendant was rightfully in possession of the apartment house, during the period between August 1, 1932, and November 25, 1932, and was entitled to retain the rents collected during that period.

“ That the assignment of rentals separately executed by the then owners of the property was not recorded is not disputed and the record is that the plaintiffs had no actual knowledge of the existence of that instrument. It is apparently conceded that that instrument cannot operate as a consent to the defendant’s possession as against the plaintiffs, and it is not disputed that the plaintiffs did not expressly consent to the possession by the defendant unless that consent is expressed within the terms of the deed of trust; nor is it disputed that the circumstances of the case do not show an implied consent. The issues rest on the proposition advanced by the defendant that it derived its authority to take possession and collect the rents either from the provisions of the trust deed or by the application to the present situation of the rules governing the rights of a ‘mortgagee in possession’.

“At common law a mortgage of real property as security was accompanied by a transfer of the possession from the mortgagor to the mortgagee. The mortgagee’s possession continued until the debt was discharged, unless otherwise expressly agreed. When by statute or otherwise a mortgage became a lien only and was no longer a conveyance, the transfer of the interest thereby acquired by the mortgagee was no longer accompanied by a change of possession. (Code Civ. Proc., sec. 744; Civ. Code, secs. 2926, 2927; 41 Cor. Jur. 608, secs. 573, 579.) There is, however, authority to support the proposition that a mortgagee, not entitled to possession in the first instance, who, at least after default, succeeds peaceably in obtaining possession of the mortgaged premises, cannot be ousted without a tender of the amount due. This doctrine does not depend on the terms of the mortgage but is applicable by virtue of the relationship existing between the mortgagor and mortgagee. (41 Cor. Jur. 609-612, sees. 577, 580; 2 Jones on Mortgages, 8th ed., sec. 824.) In defending possession under this theory the manner of the mortgagee’s entry becomes an issue. The plaintiffs here contend that the defendant obtained possession by fraud or trick and artifice, and that such an entry is unlawful. However, it becomes unnecessary to discuss that phase of the case inasmuch as it is our conclusion that the relationship among the parties, in the absence of any specific agreement, does not permit either the trustee or the beneficiary under a deed of trust to claim rights accorded to a mortgagee in possession. If the finding that the defendant was in possession by virtue of the terms of the trust deed, and therefore with the express assent given thereunder, is supported, it likewise becomes unnecessary to discuss the manner of its entry.

“ There is no history or relationship among the parties in the case of a trust deed analogous to that existing with reference to a mortgage. The rights, duties, and obligations under the tripartite agreement depend on the powers vested in and exercised by the trustee who holds the legal title for purposes of security and without any incidental right to possession in either the trustee or the beneficiary. Furthermore, conceding that the defendant may rely on a doctrine analogous to that of a mortgagee in possession, it must accept the rules governing it established under our statutes. With the exception that under a trust deed title passes to the trustee, the characteristics and purposes of a trust deed and a mortgage as they exist in this state have been held to be similar. (Bank of Italy v. Bentley, 217 Cal. 644, 655, 657 [20 Pac. (2d) 940].) The right to possession does not pass to the trustee or the beneficiary under a trust deed in the absence of a special agreement. (Meadows v. Snyder, 209 Cal. 270 [286 Pac. 1012]; 25 Cal. Jur. 41, 42; 41 Cor. Jur. 609, see. 575.) We must apply, therefore, the same rules as to the rights of the trustee or the beneficiary to possession of the premises as are applicable by statute in the case of a mortgagee, whose rights to possession, whether before or after default, are controlled by the agreement, or the consent otherwise of the mortgagor, express or implied. (Civ. Code, see. 2927; Meadows v. Snyder, supra; Cameron v. Ah Quong, 175 Cal. 377 [165 Pac. 961] ; Dutton v. Warschauer, 21 Cal. 609 [82 Am. Dec. 765]; 17 Cal. Jur. 1020-1022; 1 Jones on Mortgages, 8th ed., sec. 22.) [3] Where a mortgagee, and likewise a trustee or beneficiary under a trust deed, wrongfully ousts the one entitled to possession, he is liable as a disseisor. (19 R. C. L. 316; Meadows v. Snyder, supra.)

‘ ‘ Conversely it would seem to follow that the parties to a deed of trust may expressly agree with reference to their respective rights to possession, and collection of the rents and income to be applied to discharge the indebtedness. Such provisions have been upheld. (Mines v. Superior Court, 216 Cal. 776 [16 Pac. (2d) 732] ; Sacramento & Placerville R. R. Co. v. Superior Court, 55 Cal. 453.) Where the lending parties or their trustees are expressly given the right to enter and take possession of the property and collect and apply the rents and income to the discharge of the indebtedness, they have the option to take such possession personally or to file a petition to have .a receiver appointed to take possession. (American Bridge Co. v. Heidelbach, 94 U. S. 798 [24 L. Ed. 144].)

“ From the facts shown by the record in this case, it is apparent that the defendant in taking possession and retaining the rents collected by it during the period involved, was attempting to act pursuant to the terms of the unrecorded assignment of rentals. It is now faced with the necessity of justifying its act under the provisions of the deed of trust as against the plaintiffs, the grantees of the trustors. In the deed of trust, following the usual granting clauses, appears the following: Together also with the rents, issues, profits and income from said premises with the right at any time after default or maturity to collect the same, and to enforce this provision the trustee shall be entitled to the appointment of a receiver. ’ The defendant relies upon that language and upon the following language also appearing in the deed of trust: ‘ Should trustor fail or refuse to make any payment or do any act which he is obligated hereunder to make or do at the time and in the manner herein provided, then the trustee and/or beneficiary, each, in its sole discretion, may without notice to or demand on trustor and without releasing trustor from any obligation thereof: (1) Make or do the same in such manner and to such extent as it may deem necessary to protect the security of this deed of trust, either trustee or beneficiary being authorized to enter upon and take possession of said property for such purposes.’ ”

In our opinion the provisions of the trust deed when construed as a whole, and particularly the quoted provisions, grant to the beneficiary, in the event of default, the right to take possession and collect the rents. It necessarily follows that the trial court’s finding that the defendant was in possession pursuant to the provisions of the trust deed is amply supported and the defendant is therefore entitled to retain as against the plaintiffs the apartment rentals collected by it during the period involved.

The judgment is affirmed.

Rehearing denied.


text:
    [L. A. No. 13306.
    In Bank.
    October 30, 1934.]
    J. J. NEARY, Appellant, v. CARRIE W. PETERSON et al., Defendants; G. M. BROWN et al., Respondents.

      Horace L. Cook for Appellant.
    R Dechter, Dechter & MacKay and J. Everett Brown for Respondents.
    Solon S. Kipp, as Amicus Curiae on Behalf of Respondents.
   PRESTON, J.

This appeal involves the title to a lot located in Culver City, Los Angeles County. The question presented is that of the priority of a lien for general taxes over a subsequent lien for street improvement assessments upon the property. After a careful consideration of the cause, we are in accord with the conclusion announced by the District Court of Appeal, First Appellate District, Division One, speaking through Mr. Justice pro tern. Jamison.

Plaintiff, on November 7, 1928, brought this action to foreclose the lien of a street improvement bond issued under the Street Improvement Act of April 7, 1911 (Stats. 1911, p. 730), and acts amendatory thereof, alleging that at the time of issuance of said bond defendant Carrie W. Peterson was the owner of the lot here in question. Respondent Brown, who was served as a defendant by a fictitious name, answered, denying ownership in said Carrie W. Peterson and setting up the claim of ownership in himself by virtue of a tax deed issued to him by the tax collector of Los Angeles County. Defendant Warden, also served under a fictitious name, defaulted, as did likewise said defendant Peterson. Judgment was rendered in favor of defendant Brown. Plaintiff’s motion for new trial was denied and he now prosecutes this appeal.

Appellant’s said street improvement bond was issued by said city on September 23, 1927, and thereafter assigned to him. Respondent’s tax deed was issued to him on August 5, 1929, by the tax collector of Los Angeles County, based on a lien for state and county taxes for the year 1923. Said lot was, by operation of law, sold to the state on June 30, 1934, but was thereafter duly assessed for taxes for the years 1924, 1925, 1926, 1927 and 1928. It was purchased by respondent at public sale, pursuant to section 3771a of the Political Code, on July 27, 1929, and, on the same day, he redeemed it from the subsequent state and county taxes which had been assessed against it. At the time appellant’s street bond became a lien on said property, only the legal title thereto was in the state of California; the equitable title was at all times prior to said sale to respondent in the defendant Carrie W. Peterson.

The question, therefore, is reduced to this: Did the lien for taxes due the state destroy the lien of the improvement bond?

This question,'- for all practical purposes, was answered by the recent case of La Mesa etc. Irr. Dist. v. Hornbeck, 216 Cal. 730 [17 Pac. (2d) 143], where it was held that by section 3787 of the Political Code the former priority of liens for general taxes was subordinated and they were placed on a parity with certain enumerated liens for special assessments. This disposes of the question before us here, unless it must be held that the lien in this ease is without the exceptions set forth in said code section. A contention has also arisen as to which version of said section is applicable. Are we to consider the statute as it read in 1923, when the assessment underlying the tax deed became a lien, or as it read in 1929, when the deed to the purchaser of the tax' title was executed? The two versions, so far as here material, are:

“3787. Such deed . . . is . . . conclusive evidence of the regularity of all other proceedings, from the assessment by the assessor, inclusive, up to the execution of the deed. Such deed conveys to the state the absolute title to the property described therein, free of all encumbrances, except any lien of taxes levied for municipal or irrigation district purposes. ...” (Stats. 1917, chap. 157, p. 241.)

“3787. Such deed . . . is . . . conclusive evidence of the regularity of all other proceedings, from the assessment ... up to execution of the deed. Such deed conveys to the state the absolute title to the property described therein, free of all encumbrances, except any lien for taxes levied' for municipal, or for irrigation, reclamation, protection, flood control, public utility or other district purposes . . . ” (Stats. 1927, p. 1666, chap. 830.)

As will hereafter appear, an answer to this inquiry is not required. The phrase “lien for taxes” found in both versions of said section includes liens for special assessments. This is clear from the context, for certain agencies are included which have no taxing power except by way of special assessments.

This record also suggests the question as to whether or not said section does not relate solely to existing and prior liens upon the property at the time the assessment for general taxes became a lien and that all exceptions noted therein simply have the effect of preserving certain existing and prior liens as of said date of assessment; that said section so construed would and could lawfully have no reference to tax liens upon the property accruing subsequent to such assessment for general taxes.

But, again, we need not pause to answer this query, for we are convinced that said section, whether taken as it read in 1923 or as it read in 1929, was broad enough to apply to the special assessment lien of said Street Improvement Act. This we deduce from a construction of the phrase “municipal . . . purposes” found in the 1923 statute and the phrase “municipal ... or other district purposes” found in the section as it read at the time of the sale to respondent.

The liens are therefore on a parity, made so by statute, and the lien for the subsequent street improvement remained intact notwithstanding the sale to respondent.

The judgment is reversed.

Shenk, J., Seawell, J., Thompson, J., and Waste, O. J., concurred.


text:
    [S. F. No. 15120.
    In Bank.
    October 30, 1934.]
    MARIE G. KLEIN, Respondent, v. BOARD OF EDUCATION OF THE CITY AND COUNTY OF SAN FRANCISCO et al., Appellants.

      John J. O’Toole, City Attorney, Walter A. Bold, Chief Deputy City Attornej’, and Irving G. Breyer for Appellants.
    Francis W. Murphy for Respondent.
   WASTE, C. J.

The Board of Education of the City and County of San Francisco, and its constituent members, appeal from a judgment directing the issuance of a peremptory writ of mandate commanding them to restore respondent to her position and status as a permanent vice-principal teacher in the elementary schools of said city and county.

In October, 1904, respondent, having served her probationary period of two years, was elected a permanent teacher in such schools, without limitation as to time. Thereafter and on August 16, 1921, after two years’ probationary, service, she was elected vice-principal in such schools, without limitation as to time. The resolution covering the latter appointment declared that the persons therein named, among whom was respondent, “having served their probationary periods as vice-principals in a manner satisfactory to their principals, to the office of the Superintendent of Schools and to the Schools Committee, be and they are hereby elected regular vice-principals in the elementary schools of this Department. ’ ’ Respondent was thereafter for ten years continuously employed as a vice-principal teacher in various elementary schools to which she was assigned, and • as such performed the supervisory and administrative functions of a vice-principal and taught classes daily. On August 11, 1931, the appellant hoard dismissed her as a vice-principal but retained her as a teacher. Such action was not taken for any cause for which the law authorized the board to dismiss the holder of a permanent tenure.

Respondent’s tenure as vice-principal, but not as a teacher, is here involved. The question for decision is whether respondent had previously acquired a tenure which prevented her dismissal except for cause.

Respondent contends that the former section 1793 of the Political Code, in effect at the time of her election as vice-principal, gave her such tenure. In support thereof she relies mainly on Kennedy v. Board of Education, 82 Cal. 483 [22 Pac. 1042], construing said section. The appellants deny that a vice-principalship is a position to which the state law attaches any permanency of tenure and contend that having been retained as a teacher in the elementary schools respondent has not been reduced in “grade” within the meaning of the Kennedy case, supra.

At the time of respondent’s election as a vice-principal teacher on August 16, 1921, subdivision 1 of section 1793 of the Political Code provided that the “holders of city, or city and county, certificates are eligible to teach in cities, or cities and counties, in which such certificates were granted, in schools or classes of grades corresponding to the grades of such certificates and when elected shall be dismissed only for insubordination or other causes, as mentioned in section 1791 of this code, duly ascertained and approved by the boards of education of such cities, or cities and counties”. The language of this subdivision has remained substantially the same from its enactment in 1881 to its repeal by the School Code of 1929. (Anderson v. Board of Education, 126 Cal. App. 514, 516 [15 Pac. (2d) 774, 16 Pac. (2d) 272].) Of course, any tenure previously acquired by respondent was a vested right and remained unaffected by such repeal. (Gastineau v. Meyer, 131 Cal. App. 611 [22 Pac. (2d) 31].) In fact, section 5, of the preliminary provisions of the 1929 School Code recognized and continued previously acquired tenure.

In the Kennedy case, supra, relied on by respondent, this court had occasion to interpret the provisions of section 1793, supra, set forth above, and it was therein held that they granted tenure after election, without time limitation, to a principal teacher of the San Francisco elementary schools. In that case the petitioner had been removed without cause from her position as principal teacher of the North Cosmopolitan Grammar School and assigned to the position of principal teacher of Ocean View School, a school of lower grade, and at a reduced salary. In the course of its decision this court preliminarily declared that section 1617 of the Political Code conferred on city boards of education, as distinguished from boards of trustees of school districts, unlimited power to employ teachers and that inasmuch as the petitioner therein had been “elected precisely as provided in this section [1793, supra], without limitation as to time . . . the power of the board of education to remove her is expressly and plainly limited ... to the causes named in the section”.

This decision was followed under similar facts in Fairchild v. Board of Education, 107 Cal. 92 [40 Pac. 26], and was approved in Barthel v. Board of Education, 153 Cal. 376 [95 Pac. 892], We think its reasoning and conclusion is determinative of the present proceeding.

Apparently in view of the fact that the provisions of section 1793, supra, as construed in the Kennedy case, related and granted tenure only to those who held “city, or city and county” certificates, a state-wide teachers’ tenure was provided in 1921 (Stats. 1921, p. 1663) by amendment to section 1609 of the Political Code, into which the former section 1617, supra, was transposed. This amendment to section 1609 became effective fourteen days prior to respondent’s election as a vice-principal teacher. We find nothing in its provisions nor in the case of Bland v. Board of Trustees, 67 Cal. App. 784 [228 Pac. 395], construing the same so as to preclude a principal from acquiring tenure and permitting dismissal of such principal arbitrarily after the expiration of the term for which he was elected, that in any way affects the ultimate disposition of the present proceeding. It is declared in the last-cited case that the amended section 1609, supra, evidences “an intent on the part of the legislature to draw a distinction between a principal of a school and a principal teacher”. As stated in Anderson v. Board of Education, supra, 516, the decision in the Bland case, just above referred to, held that the 1921 amendment to section 1609 “did not grant full tenure to a principal who'was not a ‘teaching principal’ as such principals [under the amended section 1609] could be elected for a definite period only”. A vice-principal is, for all material purposes, an assistant principal, having the same right of tenure as a principal and, therefore, if the amended section 1609 makes a distinction between a principal and a teaching principal, the same distinction should exist in favor of a vice-principal teacher, in the absence of a contrary intent expressed in the statute.

Moreover, in the Bland case, supra, wherein a general demurrer to the petition was sustained without leave to amend, there was no allegation as to the period of time for which the petitioner therein had been elected, nor did it appear that he had been engaged as a teacher or principal teacher. It should also be pointed out that the petitioner in that case had been appointed by the board of school trustees of a school district and not by a city board of education. He could not therefore rely on section 1793, supra, construed in the Kennedy case, above cited, for said section applied only to the holders of city certificates.

At the time of the arbitrary demotion of the respondent herein she had been serving for approximately ten years as vice-principal teacher of elementary schools in the city and county of San Francisco. To so arbitrarily reduce her status from that of vice-principal to that of teacher, with a consequent reduction in compensation, served to violate and destroy her right of tenure as such vice-principal teacher. We cannot accept appellants’ conclusion that respondent was not reduced in “grade” because of her retention as a teacher in the elementary schools. In Cullen v. Board of Education, 126 Cal. App. 510 [15 Pac. (2d) 227, 16 Pac. (2d) 272], wherein we denied a hearing, it is held that “this right of tenure is a right which the teacher enjoys to continue in the position or positions to which he has become elected under the statute—i. e., in a position or positions of a rank and grade equivalent to that occupied for the probationary period and to which the teacher has thus become ‘elected’ under the statute”. (Italics added.) To the same effect see Anderson v. Board of Education, supra, 521, wherein it is declared that “the tenure, therefore, runs to a position of employment, or service, of equal grade and rank to that to which the statutory classification has applied, and such is the settled rule of the Kennedy case”.

Our conclusion herein is consonant with the provisions of section 135 of the recently enacted charter of the city and county of San Francisco (Stats. 1931, pp. 2973, 3057), effective subsequent to respondent’s demotion, which now extends permanent tenure to “all teachers . . . vice-principals, principals . . . after they have been successfully employed in such positions in the school department for a probationary period of three years”.

The judgment is affirmed.

Langdon, J., Preston, J., Spence, J., pro tern., Shenk, J., Thompson, J., and Seawell, J., concurred.


text:
    [L. A. No. 14748.
    In Bank.
    October 31, 1934.]
    In the Matter of the Estate of LEE A. McCONNELL, Deceased. FRANKIE E. McCONNELL, Appellant, v. BIBLE INSTITUTE OF LOS ANGELES et al., Respondents.

      Meserve, Mumper, Hughes & Robertson and Timón E. Owens for Appellant.
    Newby & Newby and Nathan Newby for Respondents.
   THE COURT.

The respondent Bible Institute of Los Angeles moved to dismiss the appeal of the appellant, surviving widow of the decedent, from an order approving a corrected account current of the special administrator, on the ground that she had failed to comply with the provisions of section 953c of the Code of Civil Procedure, and Rules V and VIII of this court. At the same time the respondent moved to affirm the judgment on the ground that the appellant is not a party aggrieved by the order. On the hearing the motion to affirm was denied.

As to the motion to dismiss, an examination of the appellant’s opening brief discloses a satisfactory compliance with the code section and the rules of court. The motion to dismiss is denied.


author: CURTIS, J.

text:
    [L. A. No. 14564.
    In Bank.
    October 31, 1934.]
    In the Matter of the Estate of JEAN CAZAURANG, Deceased. MARIE LEES, Appellant, v. ROBERT P. CARREY et al., Respondents.

      A. G. Reily for Petitioner and Appellant.
    Gray, Cary, Ames & Driscoll in Opposition to Motion.
   CURTIS, J.

Motion for substitution of attorneys. Petitioner has moved this court in the matter of an appeal pending herein for a substitution of A. G. Reily as attorney in the place and stead of her present attorneys, Gray, Cary, Ames & Driscoll. Her affidavit contains a long recital of alleged grievances not necessary to here repeat. The attorneys of record have filed herein affidavits and exhibits in opposition to the motion for substitution of attorneys herein, apparently with the idea of refuting the charges contained in the papers filed by petitioner. We are not at liberty to weigh the reasons which may have prompted petitioner to ask for a change of her attorneys. Our only duty is to pass upon her legal right to make such change.

By section 284 of the Code of Civil Procedure, petitioner is given the right to change her attorneys at any stage in the action unless the attorney has a vested interest in the subject matter of the litigation. This right of discharge exists though a contingent fee has been agreed upon, or an irrevocable power of attorney has been given. The fact that said attorney has performed labor and expended money for and in behalf of the client does not change the rule. (Gage v. Atwater, 136 Cal. 170, 172 [68 Pac. 581]; Woodbury v. Nevada etc. Ry. Co., 121 Cal. 165 [53 Pac. 450]; Todd v. Superior Court, 181 Cal. 406 [184 Pac. 684, 7 A. L. R. 938]; Scott v. Superior Court, 205 Cal. 525 [271 Pac. 906].) The reason for the rule is well stated in Gage v. Atwater, supra, wherein the court said: “In the absence of any relation of the attorney to the subject-matter of the action, other than that arising from his employment, the client has the absolute right to change his attorney at any stage in the action. The interest of the client in the successful prosecution or defense of the action is superior to that of the attorney, and he has the right to employ such attorney as will in his opinion best subserve his interest. The relation between them is such that the client is justified in seeking to dissolve that relation whenever he ceases to have absolute .confidence in either the integrity or the judgment or the capacity of the attorney.”

The attorneys of record, however, are of the opinion that their contract of employment with petitioner and the assignment by her of an “undivided thirty per cent. (30%) of all my right, title and interest in, to and of the estate of the above named decedent”, creates in them a power coupled with an interest in the subject matter of the action, and that by reason of this interest petitioner may not substitute them out of the case. The exact language of the agreement, pertinent to the present motion is as follows:

“NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
“1. First party (petitioner) hereby employs second party as her attorneys to represent her in connection with any and all proceedings for the recovery on behalf of first party of any and all property or things of value to which she may be legally entitled as legatee under the said will of said decedent, or otherwise.
“2. As consideration for the professional services to be rendered by said attorneys, first party agrees and hereby binds herself, her heirs and legal representatives, to pay second parties, their heirs and legal representatives, a fee equal in amount to thirty per centum (30%) of the value of whatever sums of money or property, or evidences of indebtedness, or securities, or other things of value which may be awarded to first party, her heirs or legal representatives, either by judgment or decree, or by compromise or settlement, from the estate of Jean Cazaurang, deceased; said amount of thirty per centum (30%) to be computed upon the net amount of money or property, or other things of value which may be distributed to said first party, her heirs or legal representatives, after deducting therefrom all taxes, fees, charges and court costs levied or imposed upon her said interest.
“3. First party does by these presents, assign, transfer and set over to said attorneys, a thirty per centum (30%) interest in and to such portion of the estate of Jean' Cazaurang, deceased, as said first party now has or hereafter may acquire; provided, however, that there shall be first deducted from the interest of the said first party, her heirs or legal representatives, all taxes fees, charges and court costs.
“4. It is mutually understood and agreed by and between the parties hereto that said attorneys shall have control of the prosecution of said claim to final determination. . . .
“5. It is further understood and agreed that in no event shall first party sell, assign, transfer, compromise or otherwise encumber or dispose of said claim or any part thereof without the written consent of the attorneys, nor revoke, or abridge, the rights and powers of the attorneys hereunder, and this agreement shall not be affected in any particular by any revocation of the authority conferred upon said attorneys, nor by any services rendered or which may be rendered by other attorneys or by the first party.
“6. It is likewise understood and agreed that second parties have the power to compromise or settle the claim of first party, with power to receive and receipt for any deed, negotiable instrument, security or other thing of value, which may be issued in settlement of said claim, and to indorse, deposit and collect in the name of the first party any check or draft, certificate of stock or promissory note, which may be received in said settlement, and to receive and retain from the proceeds of the same the amount of the fee herein stipulated to be paid.
“7. Second parties agree to diligently prosecute said' claim to its final determination to the best of their professional ability.”

The assignment upon which the attorneys place considerable reliance reads in part as follows: “I, Marie Lees, for valuable consideration, do hereby grant, bargain, sell, assign, transfer and set over unto E. W. Brewer, Jr. and Gordon Gray, Walter Ames and J. G. Driscoll, Jr. attorneys at law, an undivided thirty per cent. (30%) of all my right, title and interest in, to and of the estate of the above-named decedent, and I do hereby authorize the Superior Court of the State of California, in and for the County of San Diego, to make distribution to said attorneys of said ‘ undivided interest in and to all the property of said estate and interest in property of said estate to which I would, but for this assignment, be entitled. To Have And To Hold The Same' unto the said E. W. Brewer, Jr. and Gordon Gray, Walter Ames and J. G. Driscoll, Jr., their heirs, executors, administrators, and assigns forever. ’ ’

Despite the language of said contract and assignment, evidently framed with the idea in mind and for the express purpose of creating a power coupled with an interest which would render said employment as attorneys irrevocable, we are of the opinion that petitioner herein is entitled to an order of substitution. In the case of Todd v. Superior Court, supra, and Scott v. Superior Court, supra, contracts of employment and assignments similar in purport although not identical in language with those of the instant case, were held to be ineffectual to create a power coupled with an interest, and in both of those cases substitution of attorneys was granted.

In Scott v. Superior Court, supra, the assignment contained the following language: “Know All Men By These Presents that Marion Scott . . . does by these presents grant, bargain, sell, assign, transfer and set over unto the said party of the second part, one-half of the net recovery of all money and property received by said party of the second part from the above named estate.” The court in a careful analysis of the legal effect of the contract of employment and assignment held that the interest which the attorney gained by virtue of said assignment in the money and property secured for his client, a part of which he was to get as compensation for his services, was “an interest in that which was to be produced by the exercise of his power as attorney for his client, and did not amount to an interest in ‘the subject of the agency’ within the meaning of section 2356 of the Civil Code”, which acts to prevent the revocation by the principal of the power of any agency coupled with an interest in the subject of the agency.

We can see no difference in the legal effect of the contract of employment and assignment in the above cases and the contract of employment and assignment involved herein. In each case the assignment was given as security for the payment of the contingent fee and for reimbursement only and in neither case was there any relation of the attorney to the subject matter of the action, other than that arising from his employment. While there may be considerable doubt as to the wisdom of the petitioner in seeking such substitution inasmuch as it is possible that she may ultimately, by reason of several substitutions of attorneys, find herself in the position of having transferred and assigned away to the respective attorneys all of her right, title and interest in said estate as contingent fees, nevertheless she is entitled as a matter of right to such substitution. As the appeal is now pending in this court, this is the proper forum in which to seek substitution. (Jacobus v. Jacobus, 208 Cal. 562, 563 [282 Pac. 796].) The substitution, however, will only affect the matters involved in the proceeding here on appeal, and if she desires substitution in other matters, it will be necessary 'for her to seek an order of the court in which such matters are pending.

It is, therefore, ordered that A. G. Reily be substituted as attorney of record for petitioner herein in the proceeding involved in this appeal in the place and stead of the firm of Gray, Cary, Ames & Driscoll.

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


author: SHENK, J.

text:
    [S. F. No. 14894.
    In Bank.
    October 31, 1934.]
    STANDARD BRANDS OF CALIFORNIA, Appellant, v. HUGH H. BRYCE et al., Respondents.

      Livingston & Livingston for Appellant.
    Milton Marks, Victor P. Showers and Walter S. Barrett for Respondents.
   SHENK, J.

The plaintiff commenced an action in the Superior Court in and for the City and County of San Francisco by filing a complaint praying for certain declaratory and injunctive relief, to which the defendants Bryce filed an answer and a cross-complaint. The defendants Barrett and Ililp also filed an answer. The defendants Bryce moved for a change of place of trial to the county of Los Angeles. The motion was granted, and from the order the plaintiff appeals.

The allegations of the complaint show that the plaintiff owns certain real property in the city of Los Angeles. The defendants Bryce own adjoining property. Under a contract with the plaintiff the defendants Barrett and Hilp, copartners, erected a building on the plaintiff’s property. In the course of construction thereof certain excavating was done under the cottages on the defendant Bryces’ lot, and a concrete ledge or shelf built which connected the cottages with the wall of the plaintiff’s building. The plaintiff alleges that the defendants Bryce have notified it that their land and cottages have been injured by reason of that and other claimed encroachments and the excavations on the Bryces’ land, and other matters not necessary to mention specifically, and that said defendants intend to and will assert claims for damages against the plaintiff and commence an action against it for the sum of $7,500. It is further alleged that if there are any encroachments upon or injuries to said defendants’ property, the liability is not that of the plaintiff but of the defendants, Barrett and Hilp. The plaintiff seeks a declaration of its rights and duties with respect to the defendants Bryce and the defendants Barrett and Hilp, and in respect to the property of the defendants Bryce, and for a declaration that the liability for said claimed injuries, if any, is the liability of the defendants Barrett and Hilp and not of the plaintiff. It also asks for an injunction to restrain the defendants from commencing any action against it on account of the asserted claim of the defendants Bryce.

The ground of the appeal is that the motion for change of place of trial should have been denied because the action is not governed by section 392 (1) of the Code of Civil Procedure, and that the complaint shows that a cause for declaratory relief is alleged also against the defendants Barrett and Plilp, and that they were not joined as defendants solely for the purpose of having the action tried' in the city and county of San Francisco, the place of their residence. (Sec. 395, Code Civ. Proc.)

Aside from other considerations, the court, on making the order for change of place of trial, properly concluded that the action was one “for injuries to real property”. The plaintiff argues that because it is not in the position of a party asking for damages for injuries to real property, and that all it desires is a declaration of absence of any liability on its part on account of the acts which are claimed to have caused the injuries to the real property of the defendants Bryce, the action is not one “for injuries to real property”. Section 392 of the Code of Civil Procedure provides that “actions for the following causes must be tried in the county in which the subject of .the action, or some part thereof, is situated ... (1) for the recovery of real property, or of an estate or interest therein . . . and for injuries to real property”. Whether the place of trial is governed by this section is to be determined by the subject matter of the action as shown by the complaint. (Weygandt v. Larson, 130 Cal. App. 304 [19 Pac. (2d) 852] ; Donohoe v. Rogers, 168 Cal. 700, 701 [144 Pac. 958]; 25 Cal. Jur. 855, 857, 907, 908.) The principal question for determination under the facts disclosed by the complaint and the issues tendered by the allegations thereof' is the liability of the respective parties for injuries to real property. The alleged injuries to the real property, therefore, must be deemed to be the subject matter of the action, whether the action be brought by the person claimed to have caused the injuries, as in the present case, for the purpose of resisting the owners’ asserted claim, or whether the owners bring the action on their claim in the first instance and the other party resists by defending it. This is so also for the reason that, although the plaintiff in form has attempted to allege a cause for declaratory relief, nevertheless the facts alleged by it reveal that it is not entitled to any such relief, because it has not in fact alleged any such cause. The injury to the real property having occurred, it may be said that the only cause alleged by the complaint is the cause of action which the defendants Bryce are alleged to claim against the plaintiff. The subject matter of that cause of action is the tort, viz., the injury to the real property of the Bryces located in Los Angeles County. The only distinction between the action as stated by the plaintiff and the action as it would have been stated had the defendant sued, is, as noted, that the person claimed to have caused the injury, instead of the owners of the property claimed to have been injured, is suing as the plaintiff. The action is not, therefore, declaratory in character, but in fact presents essentially the same issues which would be involved upon a determination of the cause of action which the complaint shows has already accrued, viz., the liability of the respective parties by reason of the acts and conduct claimed to have caused the injuries. The subject matter of an action and the issues involved are determinable from the facts pleaded, rather than from the title or prayer for relief. (Luckey v. Superior Court, 209 Cal. 360, 366 [287 Pac. 450], citing 1 Freeman on Judgments, see. 366.) When, as here, the cause of action has already accrued and the only question for determination is the ultimate liability of one party on account of consequential relief to which another is shown to be entitled, it has been held that the nature of the action is not a cause for declaratory relief but is defined by the subject matter of the accrued cause of action. (See In re Sterrett’s Estate, 300 Pa. 116 [150 Atl. 159, 162]; Kaaa v. Waiakea Mill Co., 29 Hawaii, 122, 127, 128; see, also, notes in 12 A. L. R. 74-76; 50 A. L. R. 43, 44 ; 68 A. L. R. 119.) These considerations are applicable as well on the questions of the nature of the action and the subject matter of the complaint in determining the defendant Bryces’ motion for a change of place of trial. Consequently the plaintiff, by bringing the action itself in anticipation of the defendant Bryces’ claim against it, and by joining other defendants upon whom it attempts to fasten the claimed liability and who reside in a county outside the county where the real property is situated, may not deprive the owners of the property of their right to a trial in the county where the real property is located. The plaintiff may not, by this device, choose its own forum and thus evade the statutory provisions which require a trial in Los Angeles County of any cause of action shown by the complaint to have accrued.

The order is affirmed.

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


text:
    [S. F. No. 15125.
    In Bank.
    November 1, 1934.]
    J. A. GAFFIGAN, Appellant, v. FREDERICK H. LAWTON et al., Defendants; NATIONAL SURETY COMPANY OF NEW YORK (a Corporation), Respondent.

      J. W. Coleberd for Appellant.
    R. P. Wisecarver for Respondent.
   THE COURT.

This is an action against a contractor and his surety to recover for labor and materials furnished for the erection of a building. The defendant National Surety Company was served, and set up the^ defense of the statute of limitations by demurrer. The lower court sustained the demurrer without leave to amend, and plaintiff appealed. While the appeal was pending the defendant corporation was dissolved by decree of the Supreme Court of New York, and George S. Van Schaick, as superintendent of insurance of said state, was substituted as a defendant.

The lower court proceeded upon the theory that the contract of plaintiff with the contractor was oral, the contractor agreeing to pay upon the completion of the building, and the action was brought more than two years thereafter ; that therefore the action against the contractor was barred by the statute (Cal. Code Civ. Proc., see. 339); and that liability of the surety, being collateral, was discharged when the principal debt was so barred.

This view is untenable for several reasons. First, the bond itself was executed not only by the surety but by the contractor who was the principal, and it would follow that the latter’s obligation was evidenced by a written contract, and hence subject to the four-year statute of limitations (Cal. Code Civ. Proe., sec. 337), which had not run when the action was commenced. Second, our Civil Code provides that a guarantor “is not exonerated by the discharge of his principal by operation of law, without the intervention or omission of the creditor” (Cal. Civ. Code, sec. 2825); and that a surety is exonerated ‘ ‘ in like manner with a guarantor”. (Cal. Civ. Code, sec. 2840.) Third, although there is conflict in the authorities, the more reasonable and logical rule, supported by a number of cases, is that the obligation of the surety remains notwithstanding the fact that the statute of limitations has run on the obligation of the principal. (Willis v. Chowning, 90 Tex. 617 [40 S. W. 395, 59 Am. St. Rep. 842] ; Arant on Suretyship, pp. 181, 313; Spencer on Suretyship, p. 285; Stearns, on Suretyship, 3d ed., p. 132.) The rule was followed in this state in the early case of Whiting v. Clark, 17 Cal. 407, and subsequently approved in Bull v. Coe, 77 Cal. 54, 60 [18 Pac. 808, 11 Am. St. Rep. 235], The same principle is involved, and the same result is reached where the creditor fails to present his claim against the estate of a deceased principal. The surety is not discharged. (Bull v. Coe, supra; Duerr v. Sloan, 50 Cal. App. 512 [195 Pac. 475] ; Yerxa v. Ruthruff, 19 N. D. 13 [120 N. W. 758, Ann. Cas. 1912D, 809, 25 L. R. A. (N. S.) 139]; Arant on Suretyship, p. 313.) The case of Towle v. Sweeney, 2 Cal. App. 29 [83 Pac. 74], is in conflict with the principles established in the foregoing decisions, and must be disapproved.

The judgment is reversed.


author: WASTE, C. J. SPENCE, J., pro tem., Dissenting.

text:
    [L. A. No. 14725.
    In Bank.
    November 1, 1934.]
    In the Matter of the Estate of W. H. H. RALSTON, Deceased. WILLIAM JAMES RALSTON, Appellant, v. L. R. KAGARISE, as Executor, etc., Respondent.

      Edwin J. Miller, Ralph W. Miller and Samuel H. Peck, Jr., for Appellant.
    Libby & Sherwin for Respondent.
   WASTE, C. J.

This is an appeal from a decree entered in a proceeding to determine heirship.

The decedent died testate in Los Angeles County, leaving as his next of kin and heirs at law two grandsons. The pertinent provisions of his will, of which the respondent is the duly appointed and acting executor, read as follows:

“I give and bequeath in trust to L. R. Kagarise ...... my entire property at my death, both Real and Personal, wherever this property may be situated, and I hereby give and bequeath to the said L. R. Kagarise absolute authority to dispose of this my entire estate as he may see fit.......
“I appoint the said L. R. Kagarise as my executor and administrator of my estate as he has always been my good friend, and I have absolute confidence in his honesty, and will do as well in disposing of my estate as I could if I were still alive.”

The will contained no residuary clause.

Contending that the trust attempted to be created by the decedent is invalid and void for uncertainty and that the decedent’s estate therefore passed to them in equal shares as his next of kin and only heirs at law, the two grandsons commenced this proceeding. On behalf of the petitioner Hamer it was also urged that whether the trust be valid or invalid he is entitled to one-half of the property as a pretermitted heir. The appellant Ralston, being mentioned elsewhere in the will, could not advance this claim.

After hearing, the court below found that the will of decedent “does not create a trust but does by its terms give the entire estate” to the respondent executor. It was also found that the petitioner Hamer upon distribution of the estate is entitled to one-half thereof as a pretermitted heir. A decree was accordingly entered from which the petitioner Ralston, who was refused any participation in the estate, prosecuted this appeal on the judgment roll alone.

We agree with the lower court in so far as it found and concluded that the will failed to impress a trust upon the decedent’s property. It is' essential to the validity of a trust, whether express or precatory, that the language employed definitely indicate an intention to create a trust, that the subject-matter thereof be certain, and that the object or persons intended to have the benefit thereof be certain. The authorities are legion to this effect. The “trust” here involved is defective and invalid because of its complete failure to indicate either the object or the persons to benefit thereby.

We cannot, however, accept the further finding and conclusion that the will “by its terms gives the entire estate” to the respondent executor. The instrument does not purport to vest the property in respondent executor for his own individual use. On the contrary, it declares that the property is left to the respondent “in trust”. In view of this expressed intention the property, because of the invalidity of the trust, passes under the laws of intestate succession and the two grandsons of the decedent, as his next of kin and only heirs at law, are entitled to share equally therein. (Wittfield v. Foster, 124 Cal. 418, 420 [57 Pac. 219].)

'There is a well-recognized distinction between an uncertainty where the intent to establish a trust is clear- but the provisions are so indefinite as to render the trust void for uncertainty, and the uncertainty which simply indicates the want of intention to create a trust. (Loomis Inst. v. Healy, 98 Conn. 102 [119 Atl. 31].) This distinction is discussed in Pratt v. Trustees of Sheppard & E. P. Hospital, 88 Md. 610 [42 Atl. 51, 56], wherein the following appears:

“But it must be borne in mind that there is a distinction between a trust that is void for uncertainty, and an uncertainty that is simply indicative of the absence of an intention to create a trust! In the one case there is no uncertainty as to the intention to create a trust, but merely an uncertainty as to the objects to be benefited or the subject to be affected; in the othe'r case, there is simply an uncertainty as to whether any trust was intended to be created at all. If it be uncertain as to whether there was an intention to create a trust, it is obviously not the province of the courts to ingraft a trust upon the gift; but, if it be apparent from the whole will that a trust was intended to be established, then the uncertainty as to the objects or the subject of that trust will not indicate that there was no intention to raise a trust, but the uncertainty will avoid the trust attempted to be founded. Where the expressions have been held too vague to show an intention to create a trust, the devisee or legatee retains the property for his own use; but where the intention to create a trust is sufficiently expressed, and yet the objects or the subjects of it are uncertain, the gift fails and the heir or next of kin is let in to the beneficial ownership.

In Briggs v. Penny, 42 Eng. Reprint, 371, 375, it is declared :

"Once establish that a trust was intended, and the legatee cannot take beneficially. If a testator gives upon trust, though he never adds a syllable to denote the objects of that trust, or though he declares the trust in such a way as not to exhaust the property, or though he declares it imperfectly, or though the trusts are illegal, still in all these cases, as is well known, the legatee is excluded, and the next of kin take.”

The case of Maught v. Getzendanner, 65 Md. 527 [5 Atl. 471, 57 Am. Rep. 352], reviews the authorities on the issue here presented.

In the instant ease there can be no doubt as to the testator’s intent to create a trust. As already stated, he expressly declared that he left his “entire property” to the respondent executor “in trust”. His failure to designate with sufficient certainty the objects or purposes of the trust makes the same invalid and unenforceable. However, his intent being clear that the respondent executor was not to acquire a beneficial interest in the property, it passed upon his death, and, in the absence of a residuary clause in the will, to his next of kin and heirs at law, the petitioners in this proceeding, in equal parts under the laws of intestate succession.

The decree is reversed in so far as it precludes the appellant from participating in the estate of the decedent, with directions to the court below to proceed as herein indicated.

Curtis, J., Shenb, J., Langdon, J., and Seawell, J., concurred.

SPENCE, J., pro tem., Dissenting.

I dissent.

The fact that the testator used the words “in trust” is not necessarily determinative of an intention upon his part to create a trust, but such intention must be ascertained by a reading of the entire will. (In re Dever’s Will, 173 Wis. 208 [180 N. W. 839] ; Danforth v. Oshkosh, 119 Wis. 262 [97 N. W. 258] ; Norman v. Prince, 41 R. I. 402 [101 Atl. 126].) In the case first above cited it is declared: “In construing a will, the constant effort of courts is to ascertain and give effect to the intention of the testator. The phrase ‘in trust', or ‘upon trust’, has a well-settled technical meaning, and when used advisedly in a will, in connection with a devise or ‘ bequest, affords rather plain evidence of the intention of the testator. This, we say, is the result where the words have been used advisedly. As was said of this, or a similar, phrase in Davies v. Davies, 109 Wis. 129, at page 133 [85 N. W. 201], at page 203: ‘Had these words been used by a trained lawyer, the argument that they must receive their true technical meaning would be strong; but here the fact that they were used by a layman, albeit an educated man, is of great importance. The word “trust”, in its popular sense, covers many things besides the legal and technical trust. ’

“In Danforth v. Oshkosh, 119 Wis. 262, at page 276 [97 N. W. 258], at page 263, it is said: ‘Of course, the presence, or absence of words declaring an estate to be in trust is not conclusive, though they may be more or less significant of the purpose in the grantor’s mind. The question is whether the testator’s intent involved the elements of a trust as known to the law.’

“These expressions sufficiently indicate that this court has not considered the use of these words as conclusive of the intention of the testator, and has not felt precluded from making further inquiry concerning such intention, merely because the phrase ‘in trust’ or ‘upon trust’ is used in connection with a devise or bequest contained in a will. We are also impressed with the thought that where a testator says he gives ‘in trust’ or ‘upon trust’, but makes no attempt to prescribe the terms or purposes of the trust, a court may well pause and consider whether it was really the intention of the testator to create a trust in the legal sense. When the phrase ‘in trust', or ‘upon trust’, is used advisedly, he who uses it understands that the terms and conditions of the trust must be defined with definiteness and certainty. When a testator says he gives ‘in trust’, and says no more, the query most naturally arises as to whether the phrase was inserted for the purpose of creating a trust in the true legal sense. We think such a situation gives rise to an ambiguity, and the court may summon to its aid all legitimate considerations that will enable it to determine the intent of the testator with reference to the disposition of the residue of his estate . . .

“ . . . We think the phrase ‘in trust’ was used by the testator, not in its technical and legal, but in its popular, sense, and that in the connection in which it was thus used it was intended to be expressive of the trust and confidence which the testator reposed in his'lifelong friends and associates, and that it was his intention that they should take the residue of the estate, to use or dispose of as they might see fit. A gift of this kind carries with it absolute ownership. ...”

Construing the will in the instant case in the light of the foregoing authorities, I believe that the court below correctly determined that the instrument failed to impress a trust upon the property but rather disclosed an intention to make an absolute gift to Kagarise with “absolute authority” in him to dispose of the property “as he may see fit”. In view of the total absence of any language attempting to name a trust beneficiary or to specify a trust purpose, and of the evident intention to make an absolute gift to Kagarise, it must be concluded that the testator did not employ the words “in trust” in their technical sense. Moreover, even if it be conceded for present purposes that there is some uncertainty as to the testator’s intention, the will should be so construed as to validate rather than invalidate its main provisions (Civ. Code, sec. 3541) with resulting intestacy. The construction given to the will by the • court below achieves this purpose.

In my opinion the decree should be affirmed.

Rehearing denied.