author: CURTIS, J.

text:
    [L. A. No. 16397.
    In Bank.
    January 28, 1938.]
    THE PEOPLE, Appellant, v. GANAHL LUMBER COMPANY, (a Corporation), Respondent.

      Clarence W. Morris, Lincoln V. Johnson, George C. Hadley and Clifford D. Good for Appellant.

      Sehauer, Ryon & McMahon, Thomas F. Murphine and Robert W. McIntyre for Respondent.
   CURTIS, J.

This action is one in condemnation instituted by the People of the State of California to condemn for highway purposes a strip of land situated in the city of Santa Barbara. The title to the land was at the commencement of the action, and for some years prior thereto had been, in the Southern Pacific Company. Said land is located adjacent to the right of way of said company. During the early part of the year 1925, the defendant Ganahl Lumber Company began negotiations with the Southern Pacific for a site in the city of Santa Barbara upon which to establish a lumber yard for the sale at retail of lumber and other building materials. As a result of these negotiations a lease was entered into by the Southern Pacific Company and the defendant, the Ganahl Lumber Company, for all that portion of lot 538 of the city of Santa Barbara lying northerly of the right of way of said railroad company. The Southern Pacific Company further entered into an agreement to construct a spur track connecting its main line of tracks with the property leased by it to the lumber company. These two instruments while bearing different dates were delivered simultaneously by the railroad company to the lumber company. The date of such delivery was February 15, 1926. The written lease provided that the term of said lease would be for a term of one year from December 1, 1925, and thereafter, if the lumber company continued to hold over, it did so under a month to month tenancy. The rental was $50 per month. Under the terms of the spur track agreement the railroad company was to construct a spur track at the expense of the lumber company and at a cost of $2,600. However, a concession was made to the lumber company in the sum of $1,016.21 on the cost of this spur track to be repaid the lumber company by a rebate of $2 for each carload of freight shipped over said spur track until said sum of $1,016.21 had been paid. It will be seen that some time elapsed between the commencement of said negotiations and the final consummation thereof by the delivery of said lease and spur track agreement. This delay was not occasioned by the fault of either party to said lease but principally by reason of certain zoning restrictions, which until removed prevented the use of said leased premises for business purposes. Upon the delivery of said two instruments, the railroad company constructed said spur track and the defendant lumber company entered upon said leased premises and erected thereon a planing mill and a retail lumber and building supply plant, together with equipment and fixtures necessary to operate said mill and plant. These buildings and improvements were erected at a cost of approximately $40,000 and upon their completion were used by defendant in operating said planing mill and carrying on a retail lumber business. The premises were so used when this action in condemnation was instituted. On January 22, 1934, the Southern Pacific Company served notice upon defendant of the termination of said lease. The effective termination of said lease according to said notice was February 28, 1934. In April following, this action was commenced to condemn for highway purposes a portion of said leased premises and on June 6, 1934, the state highway commission took actual possession of that portion of said leased premises which the plaintiff sought by this action to condemn, and commenced the construction of a state highway thereon. On June 8, 1934, the defendant lumber company and the Southern Pacific Company entered into a new lease whereby the Southern Pacific Company leased to defendant for the monthly rental of $50 per month, that portion of said leased premises not sought to be condemned, together with adjoining land in an adjacent block, the effective date of said new lease being June 1, 1934. The other terms of said new lease were substantially like those contained in the first lease. The buildings and improvements upon that portion of the leased premises sought to be condemned were removed therefrom onto the newly leased premises. The spur track agreement was not in any way affected by this change in location of defendant’s mill and plant, but by a supplemental agreement defendant continued to use said spur track in the operation of its business after said change as it had used it before, and the same rebate of $2 per car was allowed to defendant for each carload of freight shipped over said spur track. The case came on for trial before the court without a jury, and resulted in a judgment for damages in favor of the defendant lumber company in the sum of $25,092 besides interest. Prom this judgment the plaintiff has appealed.

During the progress of the trial, the court, over the objection of appellant, admitted in evidence certain conversation and correspondence between the respondent and officers and representatives of the Southern Pacific Company during the negotiations between these parties for said lease and spur track agreement, and prior to the delivery of said lease and agreement as hereinabove stated. This evidence was admitted on the theory that the lease and spur track agreement were in fact but one instrument and should be considered and construed together, and if so construed, the contract between the parties thereto was uncertain and ambiguous in respect to the length of the term of said lease contract. While the written lease provided that the term should be one year, and thereafter in event the lessee held over it would be under a month to month tenancy, the spur track agreement provided that the lessee should be allowed a rebate of $2 per car for all freight shipped over said spur track until the sum of $1,016.21 was paid. The evidence admitted over said objection of the appellant revealed the fact that this discrepancy in the two instruments had been the subject of much discussion between the parties to said instruments pending the negotiations for said lease. In one such conversation held between Mr. Ganahl, the president of the respondent, and a representative of the railroad company, Mr. Ganahl referred to the provision in the written lease limiting the term thereof to one year and thereafter to a month-to-month tenancy, and stated that such an arrangement would not serve the purpose of a permanent lease. Thereupon the representative of the railroad company replied that the railroad company had the printed form and all leases must be made on this printed form, but as the respondent was to be allowed a rebate on the cost of a portion of the spur track for each carload of freight shipped over said spur track, said representative asked how many ears the respondent would receive over the spur track. After some consultation between the parties it was estimated that the number would be fifteen a year. The representative of the railroad company then said, “Figure it out at 15 cars a year and on the basis of $1,100 refund to you, it would take 35 years before you would get your refund back” and he then added, “as long as you haven’t earned your refund, the Southern Pacific will never cancel your lease unless they need it for railroad purposes or you don’t pay your rent or don’t comply with the laws and city ordinances relative to such property”. Other and similar conversations were had between the president of respondent and representatives of the railroad and in each of them similar assurances were given respondent that the railroad company would not cancel the lease until the spur track agreement was ‘‘worn out”. In letters passing from officials of the railroad company to the respondent during these negotiations, references are made to respondent’s ‘‘permanent lease” or to its ‘‘permanent location”. This evidence if properly admitted tended to show that it was the intention of the parties to said lease and spur track agreement that respondent’s lease of said premises was to extend to the full limit of time required for the payment of said sum of $1,016.21. Prom this and other evidence, the trial court fixed the unexpired term at the date of the commencement of this action at 22 years and 11 months, and found that the respondent was the owner of said leasehold interest for said term of years and upon such finding gave judgment in the amount hereinbefore stated.

Appellant now makes the contention that the court erred in finding that the notice of termination of said lease was ineffective and of no force and effect whatever and that at the commencement of this action the respondent was the owner of a leasehold interest in the land sought to be condemned having an unexpired term of 22 years and 11 months. This contention is predicated upon the assumption that the written lease of the parties provided after the first year of its term, only for a month-to-month tenancy and that this tenancy was terminated by the written notice given respondent by the railroad company on January 22, 1934. This contention brings up for consideration and answer the following questions: (1) Was the written lease the sole contract of the parties respecting the term for which said premises were leased, or should said written lease and the spur track agreement be construed together in determining the term of said lease? (2) If these two instruments are to be construed together in order to determine the intention of the parties as to the length of said term, are they as so construed, so uncertain and ambiguous as to permit the admission of parol evidence to explain their true meaning ? (3) If they are so uncertain and ambiguous as to admit of parol evidence, was the evidence so admitted, together with the terms of said instruments themselves, sufficient to support the findings of the trial court that the attempted termination by the lessor of said lease was of no force and effect, and that the lessee at the commencement of said action was the owner of a leasehold interest having an unexpired term, which the court found to be 22 years and 11 months in length ?

In answering the first of these three questions, we think that an examination of the two instruments, the lease and the spur track agreement, can leave little doubt that they not only relate to the same matter but that the one is necessary to explain the other. In the first place they are between the same parties, and while dated at different times, they were delivered at the same time. They each refer and concern the same subject matter, to wit: The occupancy and use of the property of the lessor by the lessee. The value of the lease would be greatly impaired without the agreement and the agreement for the spur track would be utterly valueless to the respondent without the lease. Neither would in all probability have been executed' without the other. Taken together, they contain the complete agreement and understanding of the parties. The two instruments were executed for the purpose of achieving a single purpose. “Where two or more written instruments are executed contemporaneously, with reference to the other, for the purpose of attaining a preconceived object, they must all be construed together, and effect given if possible to the purpose intended to be accomplished. ’ ’ (Burnett v. Piercy, 149 Cal. 178, 189 [86 Pac. 603], citing Civ. Code, sec. 1642; 13 Cyc., p. 603; Devlin on Deeds, sec. 845.) (See, also, Galt v. Murphy, 86 Cal. App. 516 [261 Pac. 751]; 6 Cal. Jur. 298.) From the facts as stated above and from the cited authorities, we are of the opinion that in order to ascertain the true intent of the parties to said transaction respecting the term for which the property was leased, it was proper, and in fact necessary, to consider both of said instruments, and in arriving at said intent, said lease and spur track agreement should be considered together as one instrument.

Construing the two instruments together, as in our opinion it is our duty so to do, we find that in the lease proper the term thereof is fixed at one year, and in case of holding over after said year, a month-to-month tenancy is created, while under the spur track agreement, after providing that the $2 per carload rebate shall be paid by the railroad company semi-annually, the agreement further expressly states “said semi-annual payments shall continue until a sufficient number of cars at said two ($2.00) dollars for each carload of freight yielding road haul revenue to railroad and delivered on or shipped from said track for undersigned (respondent lumber company) or any other industry locating adjacent to said track, shall equal the cost of the portion of said track from the point of the initial switch thereof to the clearance point in the center line thereof”. It is agreed by both parties hereto that the cost of that portion of said track was the sum of $1,016.21. Here we have the lease providing for a month-to-month tenancy, after the first year, while the spur track agreement provides for the construction of a spur track to be used in connection with the leased premises at the cost of respondent as to a portion of said track, with an agreement on the part of the railroad company to repay to the lumber company said cost in semi-annual payments, which “semi-annual payments shall continue until a sufficient number of cars at said two dollars per car” shall equal the cost of the portion of the track for which respondent was to be reimbursed. These two statements are at utter variance with each other, and produce an ambiguity which justified the trial court in admitting evidence to explain the real meaning and intention of the parties in the execution of the two instruments. The rule is well settled that where a document contains conflicting and inconsistent provisions, extrinsic evidence may be resorted to in order to determine the intention of the parties. (Balfour v. Fresno Canal & Irr. Co., 109 Cal. 221, 225 [41 Pac. 876]; Lemm v. Stillwater Land & Cattle Co., 217 Cal. 474, 481 [19 Pac. (2d) 785]; Gallatin v. Markowitz, 139 Cal. App. 10, 13 [33 Pac. (2d) 424]; Kenney v. Los Feliz Investment Co., Ltd., 121 Cal. App. 378, 386 [9 Pac. (2d) 225]; Raisch v. County of Monterey, 140 Cal. App. 627, 634 [35 Pac. (2d) 587].) The rule is well stated in the ease of Balfour v. Fresno Canal & Irr. Co., supra, page 225, as follows: “If the language of the contract be, as defendant contends, plain and unambiguous, and susceptible of but one construction, then the objection was good, and the evidence properly excluded. If, however, the language employed be fairly susceptible of either one of the two interpretations contended for without doing violence to its usual and ordinary import, or some established rule of construction, then an ambiguity arises, which extrinsic evidence may be resorted to for the purpose of explaining. This is not allowing parol evidence for the purpose of varying or altering the contract, or of putting a different sense and construction upon the language from that which it would naturally bear, but for the purpose of showing the circumstances under which the language was used, and applying it according to the intention of the parties.”

We now pass to the consideration of the evidence, both the extrinsic evidence admitted to explain the ambiguity in the lease and the spur track agreement, and these two written instruments themselves, to determine whether this evidence taken as a whole supports the finding of the trial court that the attempted termination of the lease was of no force or effect and that the lessee at the commencement of this action was the owner of a leasehold interest in said leased property for an unexpired term of 22 years and 11 months. If the lessee, the respondent herein, had only a month to month lease of said premises at the time the notice of termination was served upon it, then said notice was effective to terminate said lease, but if the term of said lease was controlled by the other considerations mentioned above, then the notice and the service thereof was ineffective for any purpose. The oral evidence which- has already been referred to shows without any conflict that the representatives of the lessor, the Southern Pacific Company, and the president of the respondent company, gave this matter their special attention, and said representatives of the railroad company expressly assured Mr. G-anahl, the president of respondent company, that as long as the lumber company had any unearned refund, the railroad company would never cancel the lease, or as expressed on a different occasion, the railroad company would never cancel the -lease until the spur track was “worn out”. This evidence, in our opinion, fully supports the finding of the trial court that the lease of said premises was more than a month to month tenancy at the time of the service of said notice, and accordingly the notice was ineffective for any purpose. At that time the rebates under the spur track agreement amounted to only $278, leaving a balance of $738.21. The court took the average rebate per year, and divided the sum of $738.21, by the amount of this average yearly rebate for the purpose of determining the length of time it would take to repay the full amount of said refund. The time thus ascertained was fixed as the length of the unexpired term of said lease which amounted to 22 years and 11 months. No question is raised by the appellant as to the correctness of this computation. It is conceded that if the computation is based upon the proper premise, the result is correct. In our opinion the court adopted the correct premise in thus fixing the terms of said lease, and its finding as to the length of the unexpired term of said lease and respondent’s ownership of said leasehold interest finds full support in the evidence.

Appellant next contends that the respondent by entering into the new lease with the lessor consented to the termination of the old lease. The new lease was not executed until long after the commencement of this action and after the state highway commission had taken possession of the portion of the leased land sought to be condemned. Respondent was then in the position in which it either had to retire from business or seek a new location in which it could carry on. The fact that it leased land for its new location from the same company from which it had leased the premises covered by the old lease, had no bearing, as far as we can see, upon its old lease, or upon the amount in which it was damaged by being deprived of its leasehold rights by appellant.

Appellant finally contends that the amount of damages was arrived at in a manner which was neither proper nor legal, and that said damages are excessive. Neither of these contentions has any substantial merit. Por some purpose not entirely clear to us, appellant relies upon and claims that the trial court refused to follow the case of City of Pasadena v. Porter, 201 Cal. 381 [257 Pac. 526, 53 A. L. R. 679]. In the Porter ease the landlord and tenant were made defendants in a condemnation action instituted by the city of Pasadena. The property sought to be condemned was business property owned by Porter, and leased to her tenant. Only a part of this property was the subject of said con-damnation action. The judgment in condemnation, which was affirmed, provided that the value of the tenant’s leasehold interest in the property condemned should be paid to the tenant, and the latter should continue to pay to the landlord the entire rent called for by the terms of the lease for the full terms of the lease. In that case, however, the tenant did not own the building or other improvements on said leased premises, and had no interest therein except to use the land and improvement under the terms of his lease. Accordingly, he received nothing for any improvement upon the land condemned. In the present action, as we have seen, the tenant has constructed valuable improvements, and they were in use by the tenant upon the land at the time the condemnation action was commenced. These improvements consisted of buildings and fixtures affixed to the land, and the damage sustained by the respondent was to its leasehold interest with the improvements and fixtures thereon. We fail to perceive how the rule announced in the Porter case has in any way been violated by the judgment of the trial court in the present action.

The findings of the trial court as to the amount of respondent’s damage are amply supported by the evidence. Not only respondent’s witnesses, but most of appellant’s witnesses, when asked to fix respondent’s damage under the assumption that its lease had some twenty-two years or more to run, named an amount equal to, and in most instances in excess of, the amount fixed by the court. The contention that the amount of damages is excessive is without merit.

The judgment is affirmed.

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

Rehearing denied.


source: Caselaw Access Project

author: EDMONDS, J.

license: Public Domain

text:
    [S. F. No. 15898.
    In Bank.
    January 28, 1938.]
    A. A. BROCK, Director of Agriculture, etc., Respondent, v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND (a Corporation), Appellant.

      Thomas E. Davis for Appellant.
    U. S. Webb, Attorney-General, Frank English, Deputy Attorney-General, C. J. Carey and John Selby for Respondent.
   EDMONDS, J.

By this appeal, the right to recover upon a statutory bond given pursuant to the Produce Dealers Act of 1927 (Stats. 1927, p. 1812), is challenged by the surety. It contends that the judgment of the trial court in favor of the plaintiff is not sustained by the evidence.

The suit was brought by the Director of Agriculture, in his official capacity, in conformity with the provisions of the act. The real party in interest is C. G. DeRaad, a fruit grower, and the present controversy concerns his transactions with A. G. Johns and H. A. Bonzagni, doing business as Central Fruit Distributors. In the season of 1931 the latter were buying fruit to pack and ship to markets. They had received a license from the department of agriculture authorizing them “to act as Produce Dealer” and had given the bond required. The condition of this bond, upon which the appellant is the surety, is that the principal “shall well and truly comply with the provisions of the Act, and shall faithfully and honestly handle farm products as such licensed dealer ’

In March, 1931, Johns and Bonzagni made a contract with Nash-DeCamp Company, commission merchants, with whom they had dealt for some time. This contract provided that the former, designated as the “shipper”, were indebted to the latter, named the ‘ distributor ’ ’, for more than $10,000 on account of past business; and that for -the purpose of protecting this amount and in consideration of advances not exceeding $2,500 to assist in handling the 1931 business, the shipper should permit the distributor to market all its 1931 shipments, subject to certain charges. It was also agreed that the distributor might retain 7 per cent of the selling price to apply on past indebtedness; that advances might be deducted from the proceeds; and that the distributor should have a lien on all funds belonging to the shipper, except the proceeds of fruit consigned to the shipper by the grower, to pay indebtedness and advances.

In the following month Central Fruit Distributors, as “shipper”, and C. G-. DeRaad, as “grower”, entered into a contract by which Mr. DeRaad undertook to pick and deliver all apricots grown on his ranch in 1931 to the shipper, who in turn agreed to market them. A price of $40 per ton was guaranteed, but later Mr. DeRaad waived this provision. Under this agreement Mr. DeRaad delivered 18,-834 crates of apricots, to 5,996 of which the guaranteed price applied. Central Fruit Distributors forwarded the fruit to Nash-DeCamp Company, which shipped it east for sale and submitted accounts showing the amount received for each car of fruit. Central Fruit Distributors in turn rendered an account to Mr. DeRaad.

In the 1931 season Central Fruit Distributors dealt with other growers and delivered almost 40,000 crates of apricots, including those received from Mr. DeRaad, to Nash-DeCamp Company. The company paid them a little more than the proceeds of all fruit delivered to it but did not apply these payments against the fruit of any particular grower, in spite of the fact (stipulated to at the trial of this action) that it knew at all times that Mr. DeRaad had consigned his fruit to Central Fruit Distributors for sale. Mr. De-Raad received only $1500 from Central Fruit Distributors, and at the close of the season there was due to him $1168.75 for fruit delivered on a guaranteed price basis and $2,084.23 for that delivered on straight consignment. In August, 1931, he brought suit against Central Fruit Distributors and Nash-DeCamp Company. Central Fruit Distributors went into bankruptcy in January, 1932. Later the plaintiff recovered judgment against Nash-DeCamp Company for $2,084, the proceeds of the fruit delivered on consignment. From this judgment an appeal was taken and it was affirmed. (De-Raad v. Nash-DeCamp Co., (Cal. App.) 23 Pac. (2d) 68.)

Nash-DeCamp Company then petitioned this court for a hearing. While that proceeding was pending, the company’s attorneys arranged a most unusual settlement of the matter. Mr. DeRaad was paid $2,453.47 as the amount of his judgment, interest, and costs. He signed a statement reciting that he “has changed attorneys in said action and appeal and that........has been and is substituted” for his former attorney. He also signed and verified a claim against Central Fruit Distributors and the appellant surety to be filed with the department of agriculture as the basis for a suit, and an assignment to Nash-DeCamp Company of this claim “and the indebtedness represented thereby”. These instruments were delivered to counsel for Nash-DeCamp Company. An attorney selected and paid by that company then entered into a stipulation with Corbet and Selby, counsel of record for, the company in the DeRaad case, that the petition for hearing in this court be granted, the judgment reversed, and the cause remanded for a new trial. Subsequently the same attorneys signed a stipulation in the superior court that the action be dismissed. This action was then brought upon a complaint which pleads the contracts made by Mr. DeRaad and the delivery of fruit made thereunder, and alleges that on July 28, 1933, the sum of $3,322.28 remained wholly due, owing, and unpaid to him. from Central Fruit Distributors and Fidelity Deposit Company of Maryland. The plaintiff also declares that Mr. DeRaad’s verified claim for this amount was filed with the department and thereafter assigned by him to Robert IT. Lee. ■

These facts are not disputed. However, the trial court made the following findings which are, more properly, conclusions of law: At the close of the season Central Fruit Distributors and the appellant, as surety upon the bond, owed C. G. DeRaad '$3,252.98 and interest, none of which had been paid; Nash-DeCamp Company never paid C. G. DeRaad for any of his fruit except by advances to Central Fruit Distributors, and is not responsible for the latter’s failure to pay him. Moreover, the company was entitled to pay Central Fruit Distributors; the proceeds of its sales were not trust funds and it made proper accounting of them. At the time C. G. DeRaad made demand upon it the company had none of these proceeds in its possession.

There are further findings: C. G. DeRaad had no right to recover from Nash-DeCamp Company all or any part of the judgment which he obtained against it. (This is directly contrary to the judgment in the ease which was dismissed.) The company did not agree to nor pay this judgment. After the verified claim of Mr. DeRaad against Central Fruit Distributors and the appellant surety was filed with the department of agriculture, Nash-DeCamp Company furnished the consideration for an assignment of his claim for collection. The company did not accept the original assignment which Mr. DeRaad made to it but returned it to him in substitution for one made to Robert H. Lee, who accepted the assignment and holds it for the benefit of Nash-DeCamp Company to the extent of $2,453.47 and for the benefit of Mr. C. G. DeRaad to the extent of any excess. Neither the plaintiff nor Robert IT. Lee is estopped from denying that Mr. DeRaad obtained a judgment, or that the judgment ever became final, or that it is res judicata, or that it has been paid. Furthermore it is not inequitable to allow the respondent to recover from the surety upon the bond.

The appellant contends that it was exonerated from the obligation of its bond by the agreement of Mr. DeRaad and the Nash:DeCamp Company under which, it asserts, “the parties to the judgment united forces for the purpose of mulcting the surety company”. It relies upon the rule that a surety is exonerated by any act of the creditor which prejudices its rights or lessens its security. (Sec. 2840, Civ. Code.) It also claims that the assignment made by Mr. DeRaad changed the status of Nash-DeCamp Company from that of a debtor of the grower, against which it could proceed by subrogation, to that of a creditor of the surety, in violation of section 2849 of the Civil Code.

As against these contentions the respondent takes the position that Central Fruit Distributors was a factor, and as such was entitled to sell and deliver the fruit to Nash-DeCamp Company and to receive payment for it in advance of its sale by the latter. But the evidence shows conclusively that Nash-DeCamp Company never paid Central Fruit Distributors for the DeRaad fruit. It paid them a total of $17,500 in various amounts which were entered upon its books as “advances”. Clearly it made these “advances” in accordance with the provisions of its contract with Central Fruit Distributors. The word “advance” as ordinarily used, implies a loan of money. (California Bean Growers Assn. v. Williams, 82 Cal. App. 434 [255 Pac. 751]; Shelley v. Byers, 73 Cal. App. 44 [238 Pac. 177]; 2 C. J. S. 497.) The account of Nash-DeCamp Company with Central Fruit Distributors indicates the sale of forty lots of apricots, about one-half of which came from the DeRaad ranch, and shows that $11,750 of the total advances were paid before it sold any of the DeRaad fruit. All the amounts advanced were in even thousands of dollars except two of $750 each, and no item shows any connection with the net amount due for the sale of any particular lot of fruit.

Nash-DeCamp Company concedes that it knew Mr. DeRaad had consigned his apricots to Central Fruit Distributors; thus an implied contractual relation or privity was established between it as a subagent and Mr. DeRaad. This privity made the company accountable to him and, because it had not paid for the fruit, the net proceeds of its sales constituted a trust fund for which it was liable. (Petersen v. Lyders, 139 Cal. App. 303 [33 Pac. (2d) 1030]; Bills v. Schliep, 127 Fed. 103; Union Stockyards Nat. Bank v. Gillespie, 137 U. S. 411 [11 Sup. Ct. 118, 34 L. Ed. 724].)

In bringing his action against Nash-DeCamp Company, Mr. DeRaad acted' promptly, as he was required to do by the law of suretyship, and recovered a judgment which fixed the liability of that corporation to him. Afterwards, by accepting payment from the judgment debtor, he discharged the surety from any liability for 1he debt sued upon, and the instruments which he executed in favor of Nash-DeCamp Company and its nominee transferred no right of action. However, the suit was brought only for the amount due from the apricots delivered upon consignment, apparently upon the assumption that Nash-DeCamp Company was not liable for the proceeds from the fruit upon which Central Fruit Distributors had guaranteed a minimum price. The respondent claims that he is entitled to recover from the surety for this fruit as well as for that upon which no price was set.

However, the director of agriculture has no cause of action. The bond sued upon was given in conformity with the Produce Dealers Act of 1927 (supra). Two years later the Deciduous Fruit Dealers Act of 1929 (Starts. 1929, p. 665) became a law. Only a dealer licensed under the later act may guarantee a price to a grower for his deciduous fruits. (Perkins v. Pacific Fruit Exchange, 132 Cal. App. 278 [22 Pac. (2d) 535].) It has been held that this act supplements the former and that “the possession of a produce dealer’s license procured in accordance with the Produce Dealers Act is not sufficient to excuse the failure of a dealer in deciduous fruits to have obtained the special license required by the Deciduous Fruit Dealers Act”. (People v. Jarvis, 135 Cal. App. 288 [27 Pac. (2d) 77, 84].) Since the later act places upon dealers different and additional requirements not contemplated by or included within the terms of the earlier one, it follows that the surety cannot be held liable for an obligation arising out of a contract which its principals could not lawfully make under the license which they held. (Betzer v. Olney, 14 Cal. App. (2d) 53 [57 Pac. (2d) 1376].) The obligation of a surety is strictissimus juris and it cannot be held for anything which is not within the strict letter of its contract. (Heidt v. Minor, 89 Cal. 115 [26 Pac. 627].) The contract of the surety guaranteed that the principals would comply with the provisions of the Produce Dealers Act (supra), not some other act thereafter passed by the legislature.

An additional reason why the judgment cannot be sustained is that in the present action, Nash-DeCamp Company, under its agreement with Mr. DeBaad, will profit by any recovery up to the amount which it paid. This would quite inequitably allow the company to recoup from the surety an amount for which it is liable, but payment of which it avoided by buying out its creditor and becoming the plaintiff in the case in which it was sued as a defendant.

The judgment is reversed with directions to the trial court to enter judgment in favor of the appellant.

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

Rehearing denied.


text:
    [L. A. No. 16409.
    In Bank.
    January 31, 1938.]
    LANSING BROWN, Respondent, v. Wm. REGAN et al., Appellants.

      W. I. Gilbert for Appellants.
    Sidney A. Moss and Henry H. Childress for Respondent.
   CURTIS, J.

Plaintiff recovered judgment against the defendant, F.'F. Regan, in the sum of $5,000 for injuries sustainecl by him when struck by an automobile. At or about 1:45 A. M. on June 29, 1935, the plaintiff, a pedestrian, was in the act of crossing Western Avenue between Sixth Street and Wilshire Boulevard, in the city of Los Angeles, when he was struck by a car owned by defendant, F. F. Began and driven by his son, Wm. Began. Plaintiff suffered serious injuries, and to recover damages therefor brought this action, naming as defendants both Wm. Began, the operator of the automobile, and F. F. Began, the owner. Defendants denied the allegations of negligence pleaded in the complaint and set up as a defense contributory negligence on the part of the plaintiff. The jury brought in a verdict in the following words: “We the jury in the above entitled action, find for the plaintiff, Lansing Brown, and against defendant, Wm. Began, and fix the damages in the sum of Nothing Dollars ($ ) and against the defendant, F. F. Began, the father, in the sum of $5,000 ($ ). This 7th day of October, 1936. G. W. Adams, Foreman.” The court denied the motion of F. F. Began for a judgment in his favor notwithstanding the verdict, and entered judgment that plaintiff recover from F. F.. Began the sum of $5,000, and from-defendant, Wm. Began, “nothing dollars”. From said judgment F. F. Began appeals.

Appellant contends that the verdict should be set aside and the judgment reversed upon the grounds, first, that the amount of appellant’s liability to plaintiff could not exceed that of his codefendant which was expressly found by the jury to be “nothing dollars”, and second, that the evidence establishes as a matter of law that the respondent was guilty of contributory negligence.

Appellant strongly relies upon the cases of Bradford v. Brock, 140 Cal. App. 47 [34 Pac. (2d) 1048], and Kerrison v. Unger, 135 Cal. App. 607 [27 Pac. (2d) 927], as establishing the rule that the liability of the owner of an automobile arising out of section 17141/4 of the Civil Code (now section 402 of the Vehicle Code) is identical with that of the operator of the automobile, and that where a verdict is returned against the operator of an automobile for a sum less than $5,000 for injuries to one person, under said section of the code the verdict of the jury against the owner of the automobile must be in the same sum as against the operator. Bespondent relies upon the cases of Broome v. Kern Valley Packing Co., 6 Cal. App. (2d) 256 [44 Pac. (2d) 430]; Rosse v. Marye, 80 Cal. App. 109 [250 Pac. 698), as establishing the rule that the liability of the owner of an automobile is a direct and primary liability toward the person injured by the negligent operation of such automobile by another driving with the owner’s permission, and recovery is not dependent upon a recovery being had against the codefendant of the owner. These cases establish the rule that where the liability of one defendant is predicated upon the active negligence or fault of another defendant, and the verdict is silent as to one of the defendants, the effect is that there has been merely a failure to find on one of the issues and a verdict and judgment against the other defendant is not thereby voided. Both parties agree that the instant case does not present the situation where a verdict expressly exonerating a defendant charged with active negligence or fault, automatically precludes any judgment against his codefendant, and that neither is it a case where the verdict is silent as to the operator of the car charged with active negligence. In view of the verdict, “in favor of the plaintiff Lansing Brown, and against defendant, Wm. Regan”, it is obvious that this is so. This portion of the verdict could mean only one thing, that the jury found the defendant operator, Wm. Regan, guilty of negligence in the operation of the car and the plaintiff free from contributory negligence. Appellant further concedes that plaintiff did receive serious injuries as the result of the accident. In fact, appellant relies upon the established fact that.plaintiff did receive severe injuries as the underlying premise for one of his arguments for a reversal of the judgment against him. Thus in his closing brief, appellant expressly states: “Respondent established without dispute that as a result of the accident, he had incurred hospitalization, nurses’ and doctor’s bills and medical expenses, amounting to the sum of $4,932.65.” ' This conceded amount is only $67.35 less than the verdict of $5,000 found by the jury against P. P. Regan. Furthermore, no attempt was made to contradict or minimize the testimony of the physician attending plaintiff to the effect that plaintiff’s injuries consisted of a fracture of the tibia and fibula, a traverse fracture of the right humerus, and a compression type fracture of the third, fourth, and fifth dorsal vertebrae, and fractures of the traverse processes of the second, third, fourth and fifth lumbar vertebrae, and that at the time of the trial a further operation upon plaintiff’s leg Avas imperative.

Appellant’s argument, therefore, reduces itself to this proposition. Despite the fact that the jury expressly found against the defendant operator and thereby found him responsible for the accident and guilty of the negligence charged in the complaint, and despite the admitted fact that plaintiff AAas seriously injured and his hospitalization expenses alone amounted to approximately the sum of $5,000, the amount of the verdict against the appellant, nevertheless because the jury through error fixed the damages against the operator of the automobile as “nothing dollars”, the verdict against the appellant for $5,000 must be set aside and the judgment reversed.

We may concede that there Avas error in the form of the verdict, but we are of the opinion that appellant is in no position to rely upon the error. It is obvious from the verdict, considered in conjunction AAdth the record, that the jury AA'as laboring under the mistaken idea that the liability imposed upon the owner of an automobile by section 171434 of the Civil Code (uoav section 402 of the Vehicle Code), under the theory of imputed negligence, Avas a liability substituted for the liability of the operator, and that the jury by said verdict Avas attempting to pass on to the owner of the automobile the liability of the operator of the automobile. The proper procedure where an informal or insufficient verdict has been returned is for the trial court to require the jury to return for further deliberation. (Kerrison v. Unger, 135 Cal. App. 607, 611 [27 Pac. (2d) 927].) There can be no doubt, in view of the record presented on appeal, that had the jury been required by the trial court to retire for further deliberation under proper instructions, a proper verdict Avould have been returned.

It is well established by numerous authorities that when a verdict is not in proper form and the jury is not required to clarify it, any error in said verdict is waived by the party relying thereon who at the time of its rendition failed to make any request that its informality or uncertainty be corrected. (Benson v. Southern Pac. Co., 177 Cal. 777 [171 Pac. 948]; Ambrose v. Allen, 113 Cal. App. 107 [298 Pac. 169]; Harker v. Southern California Edison Co., 83 Cal. App. 204 [256 Pac. 848]; Mitchell v. Stringer, 133 Cal. App. 207 [23 Pac. (2d) 765]; Joerger v. Pacific Gas & Elec. Co., 207 Cal. 8, 21 [276 Pac. 1017]; Van Damme v. McGilvray Stone Co., 22 Cal. App. 191 [133 Pac. 995].) An examination of the proceedings which took place upon the returning of the verdict demonstrates that the attorney for appellant, not only did not seek to have the jury returned for further deliberation in an effort to clear up the apparent ambiguity, but vigorously opposed the efforts of the attorney for the plaintiff to secure such clarification of the verdict. So vigorously did he urge his objection that the trial court was without power to require the jury to return for further deliberations, that the trial court acceded to his position, and ordered the clerk to file the verdict as rendered. His objection was wholly without merit, as the trial court retained entire control of the proceedings up to the time the jury was finally discharged from further consideration of the case, and it was not only within the power of the trial court to require the jury to clarify its verdict, but it was his duty to do so. (Van Damme v. McGilvray Stone Co., 22 Cal. App. 191, 194 [133 Pac. 995].) If mere inaction alone will constitute a waiver of a defect in a verdict, it is self-evident that the conduct of appellant’s attorney in actively opposing the efforts of the attorney for the respondent to have the defect cured will constitute a waiver. In the Van Damme case is to be found language which we deem to be appropriate to the action of the appellant in the instant case. In that case, the attorney relying on the alleged error in the verdict of the jury, which had returned a general verdict for the plaintiff, but declined to answer a special interrogatory, replied when the court offered to send the jury back if counsel desired, “the record shows they have declined to find upon it”. The appellate court held that the defendant having failed at the opportune time to object to the acceptance and recordation of the verdict, could not be heard to complain, saying.- “On the face of the record argument seems superfluous. It creates an abiding conviction that the matter was permitted to stand as originally returned by the jury with a view of thereafter reaping any technical advantage that might result by reason of the situation.” We think there is no question that attorney for appellant waived the defect in the verdict, and is estopped to rely upon such defect in the verdict upon this appeal.

We cannot agree with appellant’s second contention that the evidence establishes that the respondent was guilty of contributory negligence as a matter of law. Appellant cites the fact that plaintiff was not crossing Western Avenue between Sixth Street and Wilshire Boulevard at a crosswalk, and the stipulated fact that traffic control signals were prominently located on the north and south sides of the block in which the accident occurred, and claims that the plaintiff by not crossing at a crosswalk violated section 131% (d) of the California Vehicle Act (now section 563 of the Vehicle Code), and was, therefore, guilty of contributory negligence as a matter of law. Said section reads as follows: “At intersections where traffic is controlled by traffic control signals, or by police officers, pedestrians shall not cross the roadway against a red or stop signal, and between adjacent intersections so controlled shall not cross at any place, except in a marked or unmarked crosswalk.” Appellant interprets said section as holding that the mere erection of traffic control signals at any given intersection requires pedestrians to cross only at crosswalks. The language of said section does not support this contention. It makes it a violation of the act to cross against a red signal “where traffic is controlled by traffic control signals”, and unlawful to cross except at a crosswalk “between adjacent intersections so controlled”. An intersection is not controlled within the meaning of this section when signals at the intersection are not in actual operation. The time of the accident was about 1:45 A. M. There is no evidence that the signals at the adjacent intersections were in operation at the time of the accident.

Respondent’s version of the accident was that as he was crossing Western Avenue, he saw the Regan car coming toward him on the proper side of the street; that-as the car approached him, he stopped to let it go by, but that at that time, it swerved toward him and struck him. If this version of the accident was accepted by the jury as true, as evidently it was, the jury was justified in finding that respondent was not guilty of contributory negligence. In stopping to let the car go by, he yielded the right of way to the car. The deposition of Thomas Jurekovic, an eye-witness to the accident, was offered and read in evidence on behalf of the respondent. This evidence was not included in the transcript on appeal. It is the rule that it may be assumed by an appellate court that evidence not set forth in the record justifies the findings. (A. C. Horst Co. v. New Blue Point Min. Co., 177 Cal. 631 [171 Pac. 417]; Emerick v. Johnson, 64 Cal. App. 460 [221 Pac. 675].)

The judgment is affirmed.

Waste, C. J., Seawell, J., Edmond's, J., Langdon, J., Houser, J., and Shenk, J., concurred.


author: THE COURT. LANGDON, J., Dissenting.

text:
    [L. A. No. 16421.
    In Bank.
    January 31, 1938.]
    VINCENT M. HENRIETTA et al., Respondents, v. D. E. EVANS et al., Defendants; AUGUST G. OBERNOLTHE et al., Appellants.

      Sarau & Thompson, Frank L. Miller and Roy W. Colegate for Appellants.
    Reay, Scharf & Reay for Respondents.
   THE COURT.

This is an action to recover damages for injuries sustained in an automobile collision. Defendant Evans, driver of the car, was admittedly negligent, and defaulted. The sole question is whether defendants Obernolthe are liable as owners of the car, under the ‘ ‘ driving with consent” law, Vehicle Code, section 402.

The facts are not in conflict. Defendants Obernolthe, father and son, are engaged in the business of selling automobiles at Beaumont, California. Defendant Evans was an employee of a water district at Desert Center, some 75 miles away. On January 5, 1933, Evans went to Beaumont and negotiated with the other defendants to buy a Ford car on conditional sale. The total price was $325, the down payment $30, and the balance was to be paid at the rate of $25 per month. Evans paid $5 as a deposit to hold the car, and was to bring in the rest of the down payment. On January 20th, Evans, being on duty and unable to leave, asked Randall, a fellow employee, to take the $25 due on the down payment and bring him the car. Randall brought the money to August Obernolthe and explained that Evans wanted the car so that he could come into town to sign the necessary papers. Obernolthe gave Randall a receipt for the $25, and told him he could take the car to Evans at Desert Center, but to tell Evans to return at once to Beaumont to sign the conditional sale contract and have the certificate of ownership transferred. At the trial Obernolthe testified that he gave this permission to Evans to drive the ear only for the purpose of coming into Beaumont. This was corroborated by Randall, and there is no evidence to show that Obernolthe had authorized any other purpose or use. Randall drove the ear to Desert Center and delivered it to Evans with these instructions. Evans told Randall he would leave at once for Beaumont, and he took the ear and drove there, stopping at Indio for a short time for drinks. Arriving at Beaumont, according to his testimony, at about 1:30 or 2 P. M., he saw nobody in the Obernolthes’ place of business and drove past without stopping, continuing on the way to Colton, where the collision occurred. Obernolthe testified that he had waited for Evans the preceding evening and nearly all the following day, and was only absent for short periods.

The case was tried without a jury, and judgment went for plaintiffs. It is conceded that title to the car did not pass by the transaction, and accordingly defendants Obernolthe are liable if at the time of the accident Evans was operating the car with their express or implied permission. The burden, however, is on the plaintiffs to prove such permission. (Bradford v. Sargent, 135 Cal. App. 324 [27 Pac. (2d) 93]; Ewer v. Coppe, 199 Minn. 78 [271 N. W. 101].) In the instant case the car was voluntarily entrusted to Evans by the owners, but it is clear that the permission was merely to drive the car to Beaumont, to sign the papers and complete the sale. There is no evidence to show authorization to use the car for any other purpose or to drive it to any other place; on the contrary, the only testimony in the record is to the effect that- any other use was expressly prohibited. We have, therefore, a case of an original permission for a limited use, the scope of which was exceeded; and the question is whether the original express consent terminated prior to the accident by reason of the violation of the limitation.

The cases uniformly hold that where the permission is granted for a limited time, any use after the expiration of the period is without consent, and the owner is not liable, unless the circumstances justify an inference of implied consent to further use. (Bradford v. Sargent, supra; di Rebaylio v. Herndon, 6 Cal. App. (2d) 567 [44 Pac. (2d) 581]; Union Trust Co. v. American Commercial Car Co., 219 Mich. 557 [189 N. W. 23].)

The courts in this state have not yet definitely determined whether this same rule applies where permission is granted for use in a particular place or locality, or for a particular purpose, and the limitation is exceeded. On principal, there is no fundamental ground of distinction between a limitation of time and one of purpose or place, in so far as permission is concerned; and it would seem clear that a substantial violation of'either limitation terminates the original express consent and makes the subsequent use without permission. For example, an owner might entrust his car to another for the purpose of driving it to his home, or to a garage for repairs ; and if the driver took the car out on a pleasure trip, it could hardly be contended that he was acting with the permission of the owner. On the other hand, if the owner permitted the use of the car for a particular purpose or in a certain locality, though he gave specific instructions as to the manner of operation, the speed and care in driving, etc., it would not be reasonable to hold that the use was without permission if any of these detailed instructions were violated, for in such ease the liability of the owner could in almost every case be defeated by some showing of violation of authority. (See Arcara v. Moresse, 258 N. Y. 211 [179 N. E. 389]; Chaika v. Vandenberg, 252 N. Y. 101 [169 N. E. 103].)

This analysis has been made in cases from other jurisdictions, which have, developed a doctrine analogous to the rule of deviation in the cases dealing with liability of the employer for negligence of the employee. They hold that the substantial violation of limitations as to locality or purpose of use operate in the same manner as violation of time limitations, absolving the owner from liability. (See Heavilin v. Wendell, 214 Iowa, 844 [241 N. W. 654, 83 A. L. R. 872]; Abbey v. Northern States Power Co., 199 Minn. 41 [271 N. W. 122]; Rowland v. Spalti, 196 Iowa, 208 [194 N. W. 90]; Chaika v. Vandenberg, supra; Arcara v. Moresse, supra; note, 21 Minn. L. Rev. 823, 830.) The rule and its qualifications are clearly expressed in Chaika v. Vandenberg, supra, where the court said (169 N. E. 104):

“Here, according to the testimony of the defendant, he had given Ms son permission to use the automobile only on Long Island. When the accident occurred the son was operating the car in New York city. The restricted permission did not cover such use. At that time the son was operating the ear illegally and without the assent of the owner.
“A different question would arise if the son had received permission to use the ear but had deviated from the owner’s instructions as to the manner in which the ear was to be used or the route to be taken. Deviation by an employee from the strict line of his employer’s business or from his directions may not put the employee’s act outside the scope of Ms employment; so deviation even from the terms of permission to use the car might conceivably be insufficient, of its own force, to terminate the permission and render the use of the car illegal.”

These authorities are, in our opinion, sound, and the result reached is in conformity with the object of the statute. The instant case falls within the rule of these decisions, and it follows that under the facts appearing in the record, liability cannot be imposed upon defendants Obernolthe.

The judgment is reversed.

LANGDON, J., Dissenting.

I dissent. I am entirely in accord with the principles of law stated in the majority opinion, and as applied to the facts appearing therein, the conclusion reached cannot be challenged. But the statement that the facts are without conflict is not borne out by the record. There is a real conflict as to the scope of the permission given to drive the car, and the evidence is such that the trial court was warranted in drawing the inference that the driving at the time of the collision was with the express or implied consent of defendants.

Neither Randall nor Evans corroborated Obernolthe’s statement that Evans was authorized to drive only to Beaumont and nowhere else. Evans testified: “The best I recall the conversation with Mr. Randall at that time was, I was figuring on going on home and he told me to be sure and stop in and sign the contract as I went through Beaumont. ’ ’ And Randall’s testimony was: “He told me to take the car out to him to Desert Center and for him to return it immediately and sign the papers at Beaumont.” All the witnesses agree that Evans was instructed to drive to Beaumont at once and while there, to sign the papers; but there is no testimony save that of Obernolthe that the permission to use the car was to cease upon arrival at Beaumont, regardless of the circumstances. Evans’ testimony, on the other hand, is to the effect that he was authorized to drive the car, but to stop at Beaumont to complete the transaction; and this testimony is consistent with the inference to be drawn from the receipt calling for the $25 balance of the down payment “at time of delivery”. There were, moreover, some inconsistencies and uncertainties tending to discredit Obernolthe’s testimony; e. g., he was mistaken as to the person from whom he originally acquired the car, and as to the date that he prepared the “pink slip”.

In this state of the record the trial court was justified in drawing the inference that the express permission granted by Obemplthc sufficiently covered the use under the circumstances of the instant case.

I think the judgment should be affirmed.

Rehearing denied. Langdon, J., and Shenk, J., voted for a rehearing.


author: WASTE, C. J.

text:
    [S. F. No. 15941.
    In Bank.
    January 31, 1938.]
    TIMOTHY A. REARDON, as Director of Industrial Relations, etc., Petitioner, v. HARRY B. RILEY, as State Controller, etc., et al., Respondents.

      Everett A. Corten for Petitioner.
    U. S. Webb, Attorney-General, and W. R. Augustine, Deputy Attorney-General, for Respondent State Controller.
    Fred B. Wood, Arthur McHenry and Webb Shadle for Respondent Director of Finance.
   WASTE, C. J.

The petitioner as director of the department of industrial relations of this state, seeks the issuance of a writ of mandamus directing and commanding the respondent Harry B. Riley, as controller of the state to set up on the books of his office the sum of $1,397,185 to cover the expenditures of the department of industrial relations for the 89th and 90th fiscal years, covering the period July, 1937, to July, 1939. Petitioner seeks a similar writ directing and commanding the respondent Arlin E. Stockburger, as director of the department of finance, to approve the budget of the department of industrial relations for the 89th fiscal year, which budget has been framed upon the basis of the alleged appropriation of $1,397,185 for said biennium.

Respondent Stockburger, as director of finance, admits all of the allegations of the petition and evinces a willingness to approve the proposed fiscal year budget but his desire so to do is frustrated by reason of the failure and refusal of the respondent Riley, as controller, to set up on his books more than $1,277,185 to cover the expenditures of the department of industrial relations for the designated biennium, which amount is $120,000 less than that alleged by petitioner to have been appropriated for the department.

The controversy as to the disputed $120,000 had its inception in the following facts. It appears that pursuant to the provisions of section 34 of article IV of the Constitution, the governor submitted to the fifty-second legislature a budget, accompanied by an appropriation bill, covering the proposed biennium expenditures, among others, of the department of industrial relations in the sum of $1,297,185. As finally passed by the legislature and submitted to the governor for consideration, the budget or appropriation bill, so far as the department of industrial relations is concerned, was amended by increasing its appropriation to $1,625,185, it being specifically provided that $328,000 and $20,000, respectively, of the sum so appropriated should be expended as therein designated. Pursuant to the power vested in him by sections 16 and 34 of article IV of the Constitution, the governor signed the appropriation bill and at the time of signing appended thereto a statement of the items therein contained to which he objected, together with his reasons therefor. In paragraph “2” of his statement of objections the governor, with reference to the item for the department of industrial relations (No. 78 in the appropriation bill) stated, “I object to and eliminate” the specific and included items of $328,000 and $20,000 “for the reason that I consider the department of industrial relations and the department of finance better equipped to make such allocations, and vested with ample authority to provide through fiscal year budgets, for the needs, when known, of such functions”. In paragraph “3” of his statement of objections, the governor went on to state that he objected to the item appropriating to the department of industrial relations $1,625,185 (which general item, as shown, included the “eliminated” specific items of $328,000 and $20,000) and did “reduce the same” to $1,397,-185, the amount to which petitioner alleges his department is entitled for the biennium, “for the reason that $1,397,185 is considered sufficient to permit an 'expanded program of activities of this department for the next biennium. This amended item is . . . $100,000.00 more than originally recommended in this budget.” Thereafter the assembly reconsidered the budget and appropriation bill taking up separately, but failing to override, the governor’s action in connection with the reduction of the $1,625,185 item and the veto of the specific and included items of $328,000 and $20,000. It is our problem to here determine the effect of this action of the executive and legislative departments upon the appropriation for the department of industrial relations.

Three possible results suggest themselves, viz.:

1. That the action of the governor was a nullity, leaving all three items ($328,000, $20,000 and $1,625,185) as they were before the governor attempted to veto the first two and reduce the third by a lesser amount than the aggregate of the “eliminated” items; or
2. That the action of the governor reduced the sum of $1,625,185 originally fixed by the legislature, by the aggregate of the “eliminated” items ($328,000 plus $20,000 or $348,-000), leaving the sum of $1,277,185—the total amount claimed by the respondent controller to be -available to the department of industrial relations; or
3. That the action of the governor “eliminated” the specific and included items of $328,000 and $20,000 but did not affect the general appropriation of $1,625,185 for said department, which latter item was affected only by the express reduction thereof by the governor to $1,397,185—the amount claimed by petitioner for his department and conceded by the respondent director of finance as being available therefor.

The decision in Wood v. Riley, 192 Cal. 293 [219 Pac. 966], excludes the result first above stated. All the parties hereto concede that the cited case is authority for the proposition that the specific items of $328,000 and $20,000 are items of “appropriation” and subject to the veto power of the governor under sections 16 and 34 of article IV of the Constitution, even though included within the general appropriation of $1,625,185 to the department of industrial relations.

We are not inclined to accept the second result above indicated, and contended for by the respondent controller, as the applicable solution of this proceeding. In support thereof he contends that by the “elimination” of the specific and included items of $328,000 and $20,000, respectively, the governor ipso facto reduced the general or gross appropriation to the department of industrial relations by the aggregate of said “eliminated” specific items, or to $1,277,185, and that the governor could not then increase the “reduced” general appropriation by $120,000 (the amount here in dispute), or to $1,397,185, without prior legislative action. The result contended for by the respondent controller is required neither by law nor reason. It stultifies and improperly restricts the power vested in the governor by sections 16 and 34 of the Constitution, which sections authorize the governor to “reduce or eliminate any one or more items of appropriation of money while approving other portions of the bill . . . ”. In other words, the second result above suggested, and here contended for by the respondent controller, would permit the governor to “reduce or eliminate” the specific and included items of further “appropriation” but would preclude him from “approving”, as authorized, such other portion of the bill as contained the general “appropriation” for the department and would likewise preclude the governor from “reducing”, as was his obvious intention here, the general appropriation by an amount less than the aggregate of the “eliminated” specific and included items. Such a result is not to be favored. As declared in section 3541 of the Civil Code, “an interpretation which gives effect is preferred to one which makes void”.

On the other hand, the third result above suggested gives full effect to the intent of the legislature without unduly curtailing the power granted to the governor by the cited sections of the Constitution. As already shown, the specific and included items of $328,000 and $20,000 are items of “appropriation” within and subject to the constitutional veto power of the governor. It cannot be denied that the larger and inclusive item of $1,625,185, originally granted by the legislature to the department of industrial relations, is likewise an item of “appropriation” (Riley v. Johnson, 219 Cal. 513 [27 Pac. (2d) 760, 92 A. L. R. 1292]), and, therefore, is within the constitutional veto power of the governor. Consequently, and as in the case of specific and included items of further appropriation, the governor is free to “reduce” the general and inclusive item of appropriation as in his judgment appears proper. This he did in the instant case by reducing the general appropriation to $1,397,185. Obviously, it was not his intention that the general appropriation should thereby be reduced to $1,277,185, as urged by the respondent controller. That it was the declared legislative intention to appropriate to the department of industrial relations $1,625,-185 (prior to the governor’s reduction thereof), even though the specific and included items of further appropriation should be “eliminated” by the governor, appears reasonably certain from the subsequent action of the assembly when, upon reconsideration, it separately considered and negatively voted upon the proposition of overriding the governor’s action in “eliminating” the two specific and included items of further appropriation (which that body had added) and in “reducing” the general and inclusive item of appropriation. Had it been the legislative intention to grant to the department of industrial relations the sum of $1,625,185 only in the event the specific and included items of $328,000 and $20,000 were not “eliminated” by the governor, the subsequent vote upon the proposition of overriding his reduction of the larger appropriation would have been unnecessary following the negative vote on the two propositions to override his veto or “elimination” of the two specific and included items. In other words, we conclude that it was the original legislative intent to appropriate $1,625,185 to the department regardless of the subsequent fate of the specific and included items of further appropriation and that the governor, within the power conferred upon him by the Constitution, could properly, in his judgment, reduce the general appropriation in the manner above indicated.

This action upon his part did not, in our opinion, ¡hereby improperly increase an appropriation without legis.ative action nor did it constitute an unauthorized veto of londitional or provisional language used in connection with the specific and included items of appropriation. It was an ‘elimination” of the specific and included items and a reduction of the general and inclusive item of appropriation. Such a conclusion appears to effectuate the intent of the legislature without depriving the governor of the full effect of the veto power granted him.

A somewhat analogous result was reached with respect to special fund moneys, as distinguished from general fund moneys with which we are here concerned, when in Board of Fish and Game Com. v. Riley, 194 Cal. 37, 43—49 [227 Pac. 775], it was held, in effect, that the reduction by the governor of a specific and included budget appropriation for the fish and game commission did not abrogate or affect the continuing appropriation to the commission of all the moneys deposited in the fish and game fund and that the subsequent authorization of an expenditure greater than that provided for in the specific, included and reduced budget appropriation did not encroach upon the legislative function “since its effect is not to make an appropriation, but is merely to render available, to the extent of its allowance, an appropriation already made”. Such, by analogy, is our reasoning and conclusion herein.

It appears from the brief of the respondent director of finance, and is conceded by the respondent controller, that the predecessor in office of the respondent controller, under analogous circumstances, caused by the upholding in Wood v. Riley, supra, of the governor’s veto of a specific and included item of appropriation of 1 per cent of the fund generally appropriated by the Budget Act of 1923 for teachers’ colleges, applied to the situation a practical construction, consistent with our reasoning and conclusion herein, and set up on his books the entire 100 per cent of the appropriation notwithstanding the veto of the 1 per cent.

In conclusion, we do not find it necessary or proper to here concern ourselves with items of appropriation other than those made to .the department of industrial relations, herein represented by its petitioning director. Such other items, though perhaps presenting somewhat similar problems, are not within the issues of this proceeding and some of the parties most intimately interested therein are not now before the court.

Let peremptory writ issue as prayed.

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

Rehearing denied. Langdon, J., and Shenk, J., voted for a rehearing.


author: SEAWELL, J.

text:
    [S. F. No. 15893.
    In Bank.
    January 31, 1938.]
    IRENE FENNESSEY et al., Respondents, v. PACIFIC GAS & ELECTRIC COMPANY (a Corporation) et al., Appellants.

      Thomas J. Straub, W. H. Spaulding and Clinton F. Stanley for Appellants.
    John J. Taaffe, P. J. Murphy and George B. Harris for Respondents.
   SEAWELL, J.

Defendants Pacific Gas & Electric Company and Thomas Foley appeal from an order which granted plaintiffs’ motion for a retrial and plaintiffs’ motion for a new trial, and which denied defendants’ motion for entry of a certain form of judgment in their favor.

Plaintiffs Irene Fennessey and William J. Fennessey, her husband, sued for damages received by Irene Fennessey when she was struck by an automobile operated as a jitney bus by defendant George L. Manecis. At the time of the accident said plaintiff was in or near a safety zone on Market Street, in the city of San Francisco, at the southwest corner of Market and Tenth Streets. Defendant Thomas Foley, an employee of the defendant Pacific Gas & Electric Company, had parked a company truck in the space between the south curb and said safety zone near a pole of said company. By reason of the presence of this truck Manecis drove to the left of the safety zone.

The parking of the truck between the safety zone and the curb was a violation of state law and municipal ordinance (sec. 138, Motor Vehicle Act, in force at the time of accident, September 22, 1934; now see. 586, Vehicle Code of 1935; art. V, sec. 35, San Francisco Traffic Ordinance), unless it was ‘ engaged in the necessary performance of emergency duties”. (Sec. 8, art. VII, Traffic Ordinance.) Foley testified that he was upon the working tower of the truck at the time of the accident. There was testimony of a disinterested witness that he was not upon said tower. Defendant Manecis testified that after the accident he went in search of Foley and could not locate him for a time. Another municipal ordinance provides that it shall be unlawful to drive to the left of a safety zone on Market Street from the Embarcadero to Van Ness Avenue. Tenth Street is within these limits. There was testimony that there was insufficient space to drive between the truck and the safety zone.

Defendant Manecis defaulted. One of the contentions of defendants Pacific Gas & Electric Company and Foley was that the negligent manner in which Manecis operated the automobile after he was in the area to the left of the safety zone was the sole proximate cause of the accident. The jury returned a verdict against defendant Manecis and in favor of plaintiff for $15,000 damages. Said verdict makes no mention of the other defendants. The judgment entered by the clerk follows the verdict and likewise contains no reference to the other defendants, appellants herein.

Thereafter appellants filed notice of a motion for an order directing the clerk to enter judgment in their favor. The plaintiffs filed notice of a motion for a retrial as to said appellants on the ground that the jury had failed to return a verdict either for or against them. Plaintiffs also filed a notice of intention to move for a new trial on usual statutory grounds in the event it should be held that the verdict and judgment were in favor of said defendants. The court granted plaintiffs’ motions, and denied defendants’ motion.

It is necessary to determine whether a verdict has been returned in favor of the appealing defendants, since if there was a failure to find on the issue as to them a motion for a new'trial did not lie. (See. 656, Code Civ. Proc. ; Vitimin Milling Corp. v. Superior Court, 1 Cal. (2d) 116 [33 Pac. (2d) 1016].)

Ordinarily a verdict against one of several defendants is not a verdict in favor of those not mentioned. (Benson v. Southern Pac. Co., 177 Cal. 777 [171 Pac. 948]; Bankin v. Central Pac. R. Co., 73 Cal. 93 [15 Pac. 57]; Lloyd v. Boulevard Express, 79 Cal. App. 406 [249 Pac. 837].) But this rule is subject to the qualification that a verdict may be construed with reference to the instructions pursuant to which it was rendered. (Snodgrass v. Rand, 220 Cal. 446 [31 Pac. (2d) 198]; Crain v. Sumida, 59 Cal. App. 590 [211 Pac. 479]; Chesapeake & O. Ry. Co. v. Booth, 149 Ky. 245 [148 S. W. 61]; Pittsburg Ry. Co. v. Darlington, 129 Ky. 266 [111 S. W. 360]; Durst v. Southern Ry. Co., 161 S. C. 498 [159 S. E. 844]; 27 R. C. L. 859; 64 C. J. 1066.)

In instructing the jury in the case herein the court said:

“There are three forms of verdict: one in favor of the plaintiffs and against the defendants Manecis, Foley and Pacific Gas & Electric Company; another form of verdict in favor of the plaintiffs and against Manecis alone; and a third form of verdict in favor of the defendants.
“Now, as I have already told you, in the event that you find against Foley, that will mean also a verdict against the P. G. & E.; but in the event that you find Manecis alone was guilty of negligence, and that the action of Foley and the parked truck was not a proximate cause, then your verdict should be alone against Manecis. The other form of verdict, as I said, is in favor of the defendants.” (Italics ours.)

The court plainly intended to submit to the jury all of the several forms of verdict which they might return. A verdict against Foley and the Pacific Gas & Electric Company, excluding Manecis, was not submitted for the reason that Manecis had defaulted. We think it too plain to be questioned that the court clearly and unequivocally told the jury that if they wished to find against Manecis alone, and in favor of the other defendants, they should return a verdict against Manecis alone. In the event the jury found that the parking of the truck was not a proximate cause, in which event Foley and the Pacific Gas & Electric Company were entitled to a judgment in their favor, the jury was to use the form of verdict against Manecis alone.

After the jury had returned with its verdict and the foreman had handed it to the court the court said:

“Now ladies and gentlemen of the jury, I did not give you a verdict in favor of the defendants—certain defendants. Do I understand correctly that by this form of verdict you intended to bring in no verdict against either Foley or the Pacific Gas & Electric Company?
“A juror: That is right.
“The Court: Is that correct?
“A juror: That is correct.
“The Court: Well, then, the jury will be excused until further notice from the presiding judge. ’ ’

It is apparent that the judge questioned the jury for the very purpose of ascertaining that no issues remained undetermined—that the jury’s verdict passed upon the ease with reference to the Pacific Gas & Electric Company and Foley, as well as the defendant Manecis. If the answer of the jury had indicated that the case as to said defendants was undetermined, the court no doubt would have sent the jury back to pass upon the issues not determined. (See. 619, Code Civ. Proc.)

In Crain v. Sumida, 59 Cal. App. 590 [211 Pac. 479], the jury used one of several blank forms of verdict with which it was supplied. The verdict as returned was as follows: “We, the jury, find for plaintiff against defendant H. Sumida, and fix plaintiff’s damages for injury to his automobile in the sum of $1,150.00. We, the jury, find in favor of plaintiff for the loss of use of his automobile against said defendant. H. Sumida, and fix plaintiff’s damages therefor in the sum of $300. And we further find in favor of defendant -that plaintiff take nothing.” The jury had written in the name of H. Sumida in two places in the above form, leaving blank the third space. It was held that in the light of the instructions the concluding sentence of the verdict was in favor of K. Sumida, the other defendant.

Plaintiffs rely on Keller v. Smith, 130 Cal. App. 128 [19 Pac. (2d) 541.] There the court submitted to the jury several forms of verdict with names already filled in, the jury to indicate its decision by signing the appropriate form or forms. The jury signed a form returning a verdict against the defendant Dykes. Immediately below the verdict signed by the jury was the following form:

“We, the jury impanelled to try the above entitled cause, find for the defendants F. M. Keller and Eunice Keller.
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The jury failed to sign this form. It was held that a verdict had not been returned in favor of the Kellers. In the instant ease no form of verdict expressly providing for judgment for defendants Pacific Gas & Electric Company and Foley was submitted to the jury and left incomplete. In the circumstances herein the verdict, considered with reference to the instructions, is a verdict in favor of said defendants.

It follows that the court erred in granting plaintiffs’ motion for a retrial as to the appealing defendants on the ground that the case remained open as to them. Plaintiffs also moved for a new trial, including as grounds therefor errors of law. Since the jury had determined the case as to said defendants, the motion for new trial lay. (Secs. 656, 659, Code Civ. Proc.) The order herein appealed from by its terms grants not only plaintiffs’ motion for retrial, but their motion for new trial. The intent of the judge no doubt was to protect plaintiffs in their right to a new trial as upon a verdict .in favor of appellants in the event it should be held that he erred in determining that no verdict had been returned.

In their notice of intention to move for a new trial plaintiffs stated their intent to make said motion only in the event that the verdict and judgment already entered ‘ is to be or may be construed by the above entitled court, or assumed to be, a verdict in favor of” said defendants. The motions were submitted and acted on together. This notice is sufficient to support the order granted in the circumstances herein.

Insufficiency of the evidence cannot be considered as a ground for new trial since the order did not specify such ground. (See. 657, Code Civ. Proc.) Errors in instructions, however, constitute errors in law, one of the grounds of motion herein, for which a new trial may be granted. Plaintiffs urge numerous errors in the instructions as to proximate cause. For example, the court instructed the jury, “Proximate . . . means the closest cause, the nearest cause that you can find, the cause, if we may say it that way, in closest proximity.” This was erroneous. (Hyer v. Inter-Insurance Exchange, 77 Cal. App. 343, 347 [246 Pac. 1055]; 19 Cal. Jur. 559.) The court also gave the following instruction: “I just want to bring out the fact that here is your chain of causation, and if anything comes in between A and D to put a new light on things or to change the movement of things, that is an intervening cause.” Another instruction was as follows: “If you believe from the evidence that both defendants were negligent, and you further believe that the negligence of the defendant Manecis was an independent intervening act which was the efficient cause of the injury to plaintiff, then your verdict must be in favor of the Pacific Gas & Electric Company.” (Italics ours.) Proximate causation, it has been held, is not always arrested by the intervention of an independent concurring cause. (Merrill v. Los Angeles Gas & Elec. Co., 158 Cal. 499, 504 [111 Pac. 534, 139 Am. St. Rep. 134, 31 L. R. A. (N. S.) 559]; McKay v. Hedger, 139 Cal. App. 266, 275 [34 Pac. (2d) 221].)

Whether misleading and confusing implications in these and other instructions were cured by the charge as a whole, was a matter for the discretion of the trial court. The granting or refusing of a new trial rests very largely in the discretion of the trial court, and its action will not be disturbed in the absence of a showing of manifest and unmistakable abuse of discretion. (Sheets v. Southern Pac. Co., 212 Cal. 509 [299 Pac. 71]; Thompson v. California Const. Co., 148 Cal. 35 [82 Pac. 367]; Manufacturers’ Finance Corp. v. Pacific Wholesale Radio, Inc., 130 Cal. App. 239 [19 Pac. (2d) 1013]; Babcock v. Pacific Gas & Elec. Co., 120 Cal. App. 218 [7 Pac. (2d) 736]; Stoneburner v. Richfield Oil Co., 118 Cal App. 449 [5 Pac. (2d) 436].) The trial judge herein exercised his discretion in favor of plaintiffs. His order granting a new trial will not be disturbed on appeal.

The order granting a retrial as to appellants on the theory that no verdict had been returned for appellants is reversed. The order refusing to direct entry of a judgment expressly in favor of appellants is affirmed, since a new trial has been granted. The order granting respondents’ motion for a new trial as to appellants is affirmed. Appellants shall bear costs.

Houser, J., Curtis, J., Edmonds, J., Shenk, J., and Waste, C. J., concurred.

Rehearing denied.


author: THE COURT.

text:
    [S. F. No. 15886.
    In Bank.
    January 31, 1938.]
    PACIFIC GAS & ELECTRIC COMPANY (a Corporation) et al., Petitioners, v. THE SUPERIOR COURT OF THE CITY AND COUNTY OF SAN FRANCISCO et al., Respondents.

      Thomas J. Straub, W. H. Spaulding and Clinton F. Stanley for Petitioners.
   THE COURT.

Petition for writ of mandate and writ of prohibition. After filing their petition for hearing in this court after decision by the District Court of Appeal in Fennessey v. Pacific Gas & Elec. Co., S. F. No. 15893, ante, p. 538 [76 Pac. (2d) 104], in this court, petitioners Pacific Gas & Electric Company and Thomas Foley filed this application for writ of mandate and prohibition. Upon the granting of the petition for hearing in that case, the instant application was continued to be determined together with said ease.

The prayer of the petition is that the trial court be directed to enter judgment expressly in favor of petitioners in the case involved in action S. F. No. 15893, and prohibited from retrying said case as to them. In the event this court should be of the view that the verdict in the light of the instructions was a decision in favor of petitioners, and that grounds for granting a new trial after decision did not exist, petitioners were in doubt as to whether they could secure the relief to which they deemed themselves entitled by the appeal taken by them, or whether the proper course was to apply for writ of mandate to direct the trial court to enter a judgment expressly in their favor. For the reasons stated in case S. F. No. 15893 (ante, p. 538 [76 Pac. (2d) 104]), this day filed, the questions raised by petitioners herein have become moot, since we have sustained the action of the trial court in granting a new trial after decision of the jury. The petitioners are not now entitled to entry of a judgment expressly in their favor nor to restrain a second trial.

The petition for writ of mandate and writ of prohibition is denied.