author: WASTE, C. J.

text:
    [L. A. No. 15349.
    In Bank.
    December 29, 1937.]
    THEODORE WEINER, Respondent, v. J. B. ROOF et al., Defendants; CITIZENS NATIONAL TRUST AND SAVINGS BANK OF LOS ANGELES (a National Banking Association), Appellant.

      Chandler, Wright & Ward and John F. Gilbert for Appellant.
    Don Marlin and Isador Gralla for Respondent.
   WASTE, C. J.

This is an action for the rescission of a contract and for the recovery of money paid thereunder. It appears that J. B. Roof, Inc., a corporation, agreed to purchase a tract of land from one Connolly and to subdivide and sell the same. Pursuant thereto title was conveyed to The Farmers and Merchants National Bank of Los Angeles, as trustee under a subdivision trust, Connolly and the Roof company being the beneficiaries of the trust. The Roof company acted as sales agent and the trustee executed all contracts of sale and collected the sale prices of the lots. On November 19, 1927, plaintiff and respondent entered into a contract with the trustee bank to purchase lot 109, described in the complaint, for the sum of $3,500. Certain payments were made thereunder. Subsequently the contract was assigned by the trustee bank to the appellant bank and thereafter plaintiff paid $1890 to the latter bank as part of the purchase price. Later, upon discovering the falsity of certain representations made prior to and at the time of the execution of the contract by the selling agent, the Roof company, which representations were an inducing factor in the execution of the contract, plaintiff gave notice of his election to rescind. Judgment was entered herein decreeing a rescission of the contract and awarding respondent $3,807.01, with interest, against J. B. Roof and J. B. Roof, Inc., jointly and severally, and $1890 against the appellant bank, as trustee, the latter amount representing the aggregate of the payments made by respondent to the appellant bank, which alone has appealed.

Respondent’s right to rescind is not here questioned. In its assault upon the monetary judgment entered against it, the appellant bank in its several briefs, and the respondent by way of answer thereto, advance many arguments and contentions in an effort to establish or define the relationship borne one to the other by the several parties to the transaction. We find it unnecessary to definitely determine their status other than to state that the appellant was properly described in the judgment as ‘ trustee ’ ’ if for no other reason than that the contract assigned to it expressly declared that appellant’s assignor and predecessor' in interest was not the “beneficial owner of the property” but that it “simply holds legal title to said premises for the purpose of protecting the beneficial owner of the property” and other designated purposes. In other words, the appellant, assignee, had knowledge of the existence of the trust and took subject thereto.

Subsequent to the trial of this cause we handed down our decision in the case of Speck v. Wylie, 1 Cal. (2d) 625 [36 Pac. (2d) 618, 95 A. L. R. 760]. As a limitation upon the rule theretofore announced in Gridley v. Tilson, 202 Cal. 748 [262 Pac. 322], to the effect that a principal was bound only by the representations embodied in a written contract when it was provided therein that the agent’s authority went no further, we held in Speck, v. Wylie, supra, that an innocent principal so contracting with another may relieve himself of liability in deceit for the fraud of his agent, but is nevertheless subject to rescission on the part of the defrauded party. This rule proceeds upon the theory that an innocent principal so contracting may not be permitted to enrich himself by reason of his agent’s fraud and that any property received by such principal is held by him as a constructive trustee for the person defrauded.

This doctrine has application here. The fact that respondent's written contract to purchase a lot contained a clause restricting the representations to those therein set forth, did not preclude the respondent under the foregoing rule, from rescinding the contract for the false representations of the selling agent and recovering the money paid thereunder from the principal or any trustee to whom the same had been paid. However, inasmuch as the rule in Speck v. Wylie, supra, is grounded upon unjust enrichment, and was announced subsequent to the trial of this cause, we are of the view that the appellant, as trustee of the money paid to it by respondent, should be afforded the opportunity of showing, as it asserts it can, that it has paid over to the beneficial owner the money for which judgment has been taken against it. Such a showing, if made, will disclose that the appellant, an innocent party to the fraud, has not been unjustly enriched and will preclude the entry of a monetary judgment against it under the rule mentioned.

That portion of the judgment awarding plaintiff $1890 as against the appellant Citizens National Trust and Savings Bank, as trustee, is reversed, with directions to the court below to permit said appellant if it be so inclined, to offer evidence as to the disposition of the money paid to it by the respondent, and the court is further directed, upon such showing being made, to make its findings and enter judgment as between said two parties in conformity with the views herein expressed.

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


source: Caselaw Access Project

author: EDMONDS, J.

license: Public Domain

text:
    [L. A. No. 15229.
    In Bank.
    December 30, 1937.]
    In the Matter of the Estate of RENE GRIVEL, Deceased. LEON R. GRIVEL, Administrator, etc., Respondent, v. JOHN R. WARDLAW, Administrator, etc., Appellant.
    Sherman Anderson and Guy Richards Crump for Appellant.
    Lawler & Felix, as Amici Curiae, on Behalf of Appellant.
    Edgar T. Fee and Franklin J. Cole for Respondent.
   EDMONDS, J.

The controversy presented by this appeal concerns only the right of the estate of Rene Grivel to the proceeds of the sale of certain cotton which, it is claimed, came into the possession of its administrator and was sold by him without accounting to the estate therefor. Sustaining objections made to the account of the administrator, the probate court made an order charging him and his sureties with the sum of $17,500 and interest. The appellant, who is the administrator of the estate of the deceased administrator, contends as ground for reversal that the findings of fact are not supported by the evidence and that these, in turn, do not support the order.

For about ten years and until his death in 1928, C. T. Wardlaw was the administrator with the will annexed of the estate of Rene Grivel by appointment from the Superior Court of Imperial County. After his death an amended and supplemental account of the estate was presented by John R. Wardlaw, as administrator of the estate of C. T. Wardlaw. This account was settled and allowed as to all items, except the cotton now in dispute, by an order which was affirmed upon appeal. (In re Estate of Grivel, 128 Cal. App. 186 [17 Pac. (2d) 172].) Upon a further hearing of the account for the purpose of determining the issues concerning ownership of the cotton and the proceeds of its sale, the court upheld the objections of the successor administrator who claims that C. T. Wardlaw as administrator received 271 bales of cotton belonging to the estate of Rene Grivel and made no account therefor.

The findings of the court are that C. T. Wardlaw, while acting as administrator of the estate of Rene Grivel, came into possession of 271 bales of cotton which were the property of Rene Grivel and Henry De Nancy, a partnership; that Mr. De Nancy as the surviving partner of the deceased agreed with the administrator that he would deliver to him every alternate bale of cotton harvested from the partnership lease subsequent to the death of Grivel “as full payment of land rentals owing the Long Ranch and/or their lessees or landlord, and also that out of said cotton said . . . administrator would satisfy in full the note of $17,500 owing the Globe Oil Mills Company, a corporation”; that the administrator procured 20 bales of cotton belonging to the partnership from the Globe Oil Mills Company, a corporation, “upon the assurance . . . that he would pay the partnership note of $17,500 from the proceeds of the sale of the partnership cotton”; that none of the proceeds of the sale of the cotton, which amounted to $39,906, was applied to the pa3ment of the $17,500 note or the land rentals, but was paid by one O. G. Hopkins, whom Mr. De Nancy “dealt with” as the agent of the administrator, to other persons and for other purposes with the knowledge and consent of the administrator and in violation of his agreement with the surviving partner. The conclusion of law from these facts is that the deceased administrator and his sureties are chargeable with $17,500 and interest.

The trial court found that C. T. Wardlaw received the cotton as administrator and pursuant to an agreement to pay land rental and a note which were debts of the partnership, but it also found that the cotton was the property of the partnership. As partnership property it was not a part of the estate of the deceased partner (sec. 2419, Civ. Code; Perelli-Minetti v. Lawson, 205 Cal. 642 [272 Pac. 573]), and could have been recovered by the surviving partner. (Wrightson v. Dougherty, 5 Cal. (2d) 257 [54 Pac. (2d) 13]; Fong Sing v. O'Dell, 50 Cal. App. 55 [194 Pac. 745]; Swanson v. Siem, 124 Cal. App. 519 [12 Pac. (2d) 1053].) The court did not find that Mr. Wardlaw misappropriated the proceeds of the cotton. It found only that they were used by Mr. Hopkins, with Mr. Wardlaw’s consent, for purposes other than the payment of the two specified partnership debts. This is not a finding of fact which would charge the deceased administrator with the sum of $17,500 or any other amount.

The order is reversed, and inasmuch as it appears that no substantial showing could be made on a retrial that the cotton did not belong to the partnership, the trial court is directed to settle and allow the account as presented by the administrator of the estate of C. T. Wardlaw, deceased.

Shenk, J., Nourse, J., pro tem., Waste, C. J., and Lang-don, J., concurred.


author: THE COURT.

text:
    [Sac. No. 5186.
    In Bank.
    January 10, 1938.]
    GOLDEN ARROW MINES, INC., et al., Respondents, v. GEORGE W. HICKMAN et al., Appellants.
    Breed, Burpee & Robinson and David K. Gilmore for Appellants.
    A. J. Just, Julius A. Strauss and Charles H. Secombe for Respondents.
   THE COURT.

is a motion to dismiss an appeal for an alleged failure to file the transcript within time. Examination discloses that the motion was prematurely filed and noticed. It is settled that the forty-day period prescribed in rule I for the filing of the transcript does not commence to run, when, as here, proceedings for the preparation of a record to be used on the appeal have been instituted, until such proceedings are terminated in the trial court. In the present case, the order terminating proceedings for a record was made on September 7, 1937. The motion now under consideration was noticed for a time less than forty days thereafter and, as stated, was premature.

Respondents also allege that the issues involved in the main appeal are moot by reason of the appellants’ failure “to file a Moratorium or Affidavit of Labor done upon the mining claims involved ... as required by the laws of the United States of America ... ”. Nowhere in the points and authorities cited in support of the motion to dismiss is any reference made to this latter ground of the motion and no citation of a pertinent statute or section thereof is attempted to be made. Upon such a showing we are not inclined to attach any significance to the point. It is not our function to develop the contention.

The motion to dismiss is denied without prejudice.


text:
    [S. F. No. 15874.
    In Bank.
    January 12, 1938.]
    GEORGE C. W. EGAN, Petitioner, v. THE STATE BAR OF CALIFORNIA, Respondent.

      George C. W. Egan, in pro. per., for Appellant.
    Philbriek McCoy for Respondent.
   THE COURT.

This is a proceeding to review a recommendation of the Board of Governors of the State Bar that petitioner, George C. W. Egan, be disbarred. The local administrative committee which heard the charges against him recommended suspension for one year. The examiner who conducted the hearing before the local committee filed a statement, in opposition to the recommendation of the committee, wherein he stated that in his view a reprimand and restitution would constitute the proper disciplinary action.

Petitioner was charged with appropriating to his own use funds collected by him upon a judgment recovered by his client, Mary E. Sheehan, the complaining witness herein. Petitioner has at all times during this proceeding admitted the misappropriation. But he contends that the penalty recommended is “unfair, unjust and unwarranted’ ’. In his petition for the writ of review he states that no proceeding has ever before been taken against him by the State Bar, and that all moneys appropriated by him have now been repaid. He attached to the petition an unverified statement made by Mary E. Sheehan to the effect that full and complete restitution had been made to her. The date of restitution does not appear either from the petition for writ of review or from the statement of Mrs. Sheehan. At the time of the hearing before the local committee the funds had not been restored. It is also set forth in Mrs. Sheehan’s statement that petitioner has two minor chidren, who will be without support if he is permanently disbarred. Under our decision in Allen v. State Bar, 218 Cal. 19, 26 [21 Pac. (2d) 107], this statement is not properly a part of the record in this proceeding.

In 1931, at the time of the commission of the offense upon which this action rests, petitioner was forty-three years of age, and had been practicing law in this state for more than twenty-one years. The evidence presented at the hearing before the local committee related entirely to the offense charged. That is, petitioner made no attempt to develop facts relating to his previous record and career as a lawyer, with a view of influencing the committee in its recommendation as to disciplinary action in his case. (Allen v. State Bar, supra.)

The facts, as they appear from the record, are as follows: Petitioner was employed in October, 1931, by Mrs. Sheehan to collect a judgment she had recovered in the Municipal Court of San Francisco. He was to retain 25 per cent of the amount collected as his fee. In October he accepted and receipted for a check, or checks, for the full amount due on the judgment—$266.21. He informed Mrs. Sheehan that he had collected only $75, and that the judgment debtor would make monthly payments. He paid her $56, which is approximately three-fourths of $75.

At the hearing before the local committee he claimed that two checks were sent in payment of the sum of $266.21 due on the judgment. He lost both checks, but subsequently regained possession of the larger of the two checks and collected it. The amount of the smaller cheek was never paid, according to petitioner, and the check was still outstanding. However, petitioner himself testified that this check was for only a small part of the $266.21, the larger check being for about $242. Of the amount collected, petitioner appropriated to his own use all but the sum of $56, which he paid to Mrs. Sheehan.

Thereafter, in February, 1932, he paid Mrs. Sheehan $37.50. This remittance was accompanied by a note to Mrs. Sheehan’s husband as follows: “Jack: I expected "to clear up that balance yesterday, but I also was disappointed. The ‘wherewithal’ may come in to-day or to-morrow. If it does I will send it out. I enclose you ek. for $37.50. Please be patient. Gr. E.”

Several months thereafter Mrs. Sheehan learned through the attorney who had represented her in the action in which she recovered the judgment in question that petitioner had collected said judgment in full. She confronted petitioner with this information. He then admitted that he had collected the judgment in full and spent the money. He promised to repay her. According to petitioner, it was satisfactory to Mrs. Sheehan that he should pay as he was able. The only other payments ever made by him were $15 in December, 1932, and $10 in January, 1933, making a total of $118.50 repaid to Mrs. Sheehan of the sum of $266.21 (or possibly a slightly lower sum) collected by petitioner.

The $15 remittance was accompanied by a note in which petitioner said: “The other mone; of which I spoke to you about has not come in, but just as soon as it does I will send you half of it. ... I will endeavor to send you more this week, and if not, not later than next Monday.” With the $10 payment of January, 1933, was a note in part as follows: “I will send you a check each week hereafter until the a/c is cleaned up. I am very, very sorry that this happened and trust that you will be a bit more patient with me. ’ ’

Between this last payment in January, 1933, and the hearing of the proceeding against him by the local committee of the State Bar in February, 1937, petitioner made no further payments. As noted above, he states in his petition for review that he has now made full restitution. Whether restitution was made before or after the local committee and the board of governors of the State Bar had made their recommendations of suspension and disbarment, respectively, does not appear.

At the hearing before the local committee petitioner suggested that he had information that Mrs. Sheehan had expressed a willingness to leave town and remain away for a time (thereby absenting herself from the hearing of her charges against petitioner before the local committee) if a substantial sum of money was paid to her. He suggested that an investigator for the State Bar should contact Mrs. Sheehan and inform her that petitioner had made arrangements to pay her whatever was necessary “to get her out of town”, with a view of ascertaining if she was still of the same mind. The committee refused to accede to this suggestion.

We find nothing in the record which tends to show that petitioner is inherently dishonest or that he was ever before accused of any dishonest acts in his transactions with his clients or with others. The record indicates that petitioner, during the entire transaction and doubtless prior thereto, had been buffeted by a maelstrom of financial difficulties, which likely threatened his means of subsistence and that of those, if any, dependent upon him. These circumstances, whatever may have been their compelling power to drive him beyond the bounds of moral rectitude, are not recognized by the letter of the law as a defense to acts which are in their nature incriminatory. The circumstances in which an offense is committed may, however, be considered in mitigation of punishment in proper cases, in the discretion of the court or body empowered to impose penalties.

In the instant case Local Committee No. 5 of the State Bar in and for the City and County of San Francisco, by a unanimous vote, recommended the suspension of petitioner for a period of one year. The examiner for the committee, who conducted the proceeding, was of the view that a reprimand, upon restitution being made, would constitute proper disciplinary action. The board of governors of the State Bar, by a vote of nine to six, recommended disbarment. Petitioner’s professional and business residence is the city of San Francisco. The recommendation of the local committee, which was in closer touch with the personal attributes of petitioner and the background of the case on the hearing than are we on the record, has caused us to hesitate to award the extreme penalty provided by law. Especially is this so since the recommendation of disbarment made by the board of governors was by a nine to six vote.

The conduct of petitioner was highly censurable. It is largely with the hope that our order may have a sufficiently deterrent effect upon petitioner, and impress him with the necessity of keeping the record clear in the future, even under the stress of extremely necessitous circumstances, that we have concluded to impose the lesser penalty.

It is the order of this court that petitioner be and he is hereby suspended from the practice of the law in this state for a period of one year, effective thirty days after the filing of this order.


text:
    [L. A. No. 16377.
    In Bank.
    January 17, 1938.]
    MERIAL KINDRED, Appellant, v. PACIFIC AUTOMOBILE INSURANCE COMPANY (a Corporation), Respondent.

      Will H. Winston for Appellant.
    Finlayson, Bennett & Morrow, Henry L. Knoop and John C. Morrow for Respondent.
   WASTE, C. J.

The appeal herein was dismissed by the District Court of Appeal of the Second District, Division Two, for failure of appellant’s opening brief to comply with certain requirements of rule VIII. A petition for hearing in this court was granted because of what appeared to be a too technical application of the rule. After the order of transfer was made the rule was amended in such manner as no longer to authorize the dismissal of the appeal for violations thereof.

Appellant’s brief challenges the propriety of the trial court’s action in admitting certain evidence and in directing a verdict for the defendant. It appears that plaintiff, in another action, recovered a judgment against the owner and operator of a Studebaker truck for damages alleged to have resulted from its negligent operation. That judgment became final and, being unsatisfied, appellant commenced this action against respondent to recover on a policy of public liability insurance issued by respondent as insurer to the owner of the truck. The policy sued on contains a provision reading as follows: “In consideration of the reduced premium at which this policy is issued, it is agreed that the regular and frequent use of the commercial automobile described in the policy is and will be confined during the policy period to the territory within a 50 mile radius of the place of principal garaging of such automobile; and that no regular or frequent trips are or will be made during the policy period to any location beyond a 50 mile radius from the place of principal garaging of such automobile; that the assured does not and will not during the policy period advertise or solicit the hauling of goods, materials or commodities to a location beyond a 50 mile radius from the place of principal garaging of such automobile.” Reasonably interpreted the phrase “regular and frequent use”, as employed in the quoted provision, means the principal use, as distinguished from a casual or incidental use, in the regular course of the assured’s business.

The “policy period” began on July 5, 1935, and ended on July 5, 1936, and the place of “principal garaging” of the truck was designated in the policy as El Centro, Imperial County, California. The accident out of which plaintiff’s damages arose occurred on August 14,1935, in Tulare County. At the time, the truck was being there operated with the consent and by the direction of defendant’s assured. The evidence discloses without conflict that during the year 1935 the assured was, and for several years prior thereto had been, engaged in the business of buying fruit from orchardists in Fresno and Kings Counties and marketing it in Los Angeles; that at the beginning of the 1935 fruit season he moved the truck from El Centro, described in the policy as the principal place of garaging, to Fresno County; and that thereafter and until the date of the accident it was used principally and frequently, if not exclusively, in the regular course of the assured’s aforesaid business. More specifically, the evidence establishes that the truck was used continuously in distributing empty boxes among various orchards in Fresno and Kings Counties, in gathering picked fruit from said orchards and hauling it to Los Angeles. These several places were more than 50 miles from the place of “principal garaging” of the truck.

This evidence was produced by the defendant and plaintiff made no effort to controvert it. We are of the view that the evidence indisputably establishes that the assured, after the issuance of the policy and before the accident, so caused his truck to be operated as to do violence to that clause of the policy which restricted the “regular and frequent use” of the truck to the territory within a 50-mile radius of the place of “principal garaging”. This being so, it follows that at the time of the accident the truck was being operated outside the terms of the policy and was not covered thereby. It is settled that, under such circumstances, persons injured by said truck, such as the appellant here, have no greater rights than the assured who, by reason of his operation of the truck outside the terms of the policy, obviously had no coverage thereunder. (Hynding v. Home Acc. Ins. Co., 214 Cal. 743 [7 Pac. (2d) 999, 85 A. L. R 13]; Purefoy v. Pacific Auto Ind. Exch., 5 Cal. (2d) 81 [53 Pac. (2d) 155]; Purcell v. Pacific Auto Ins. Co., 19 Cal. App. (2d) 230 [64 Pac. (2d) 1114]; Sears v. Illinois Ind. Co., 121 Cal. App. 211 [9 Pac. (2d) 245].) This result follows, under the evidence in this ease, whether the above-quoted provision of the policy be regarded as a warranty by the assured as to the operation of the truck, as an insuring agreement affirmatively defining the coverage, or as an exclusion or exemption clause. The state of the record and our conclusion thereon make it unnecessary for us to here characterize the provision. A determination thereof is principally relevant to the burden of proof but here, as we have stated, the defendant assumed and discharged the burden of proving that the truck, by reason of its “regular and frequent use” beyond the territory within a 50-mile radius of the place of “principal garaging”, is without the coverage of the policy.

We find no error in the rulings of the trial court with respect to the testimony of Young Kim, general manager of the K. & S. jobbers to whom the assured sold fruit in Los Angeles. His testimony that Tony Solano, the assured’s employee, made six deliveries of fruit to the K. & S. Company in Los Angeles between July 29 and August 9, 1935 (all within the “policy period”), is pertinent and relevant when considered in connection with the testimony of said Solano to the effect that while employed by the assured he drove no truck other than the one responsible for appellant’s damages.

The motion to dismiss is denied and the judgment is affirmed.

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

Rehearing denied.


text:
    [L. A. No. 16424.
    In Bank.
    January 18, 1938.]
    THE CHARLES F. HARPER COMPANY (a Corporation), Appellant, v. DeWITT MORTGAGE & REALTY COMPANY (a Corporation) et al., Defendants; JOHN H. BLAIR et al., Respondents.

      Henry O. Wackerbarth for Appellant.
    Porter & Sutton for Respondents.
   EDMONDS, J.

This appeal presents for review an order of the superior court denying a motion of the plaintiff to enter judgment against the sureties upon an undertaking given to stay the execution of a judgment directing the payment of money. The question for decision is whether the statute of limitations runs in favor of the sureties in such a case, and if so, what period of time is to be applied.

The plaintiff brought action and recovered a money judgment. To get a stay of execution pending an appeal, the defendants filed an undertaking executed by John H. Blair and C. E. Rachal, the respondents here, in the form required by section 942 of the Code of Civil' Procedure. Thereafter the judgment was affirmed, and a remittitur issued which was filed in the trial court on August 17, 1931. On June 26, 1936, the judgment not having been paid in full, the plaintiff served and filed notice of motion for the entry of judgment against the sureties on the undertaking. At the hearing, counsel for the respondents objected to the granting of the motion upon the ground that any claim against them was barred by the statute of limitations, more than four years having elapsed from the date of the filing of the remittitur. This objection was sustained and the motion denied.

The appellant contends that by executing the undertaking the respondents became parties to the original suit and that the motion for judgment against them was a step in that action—not a new action or a special proceeding. From this premise it argues that as statutes of limitation only apply to actions or special proceedings and the summary remedy provided by statute for enforcing the obligation is neither of these, the plaintiff is entitled to have judgment entered upon its motion at any time during the five-year period within which an action may be brought upon its judgment against the defendants in the action. The sureties take the position that the motion is barred either under the four-year statute of limitation applying to “an action upon any contract, obligation or liability founded upon an instrument in writing” (sec. 337, Code Civ. Proe.), or at the expiration of the three years fixed as the period of limitation “upon a liability created by statute, other than a penalty or forfeiture”. (Sec. 338, Code Civ. Proc.)

The undertaking executed by the respondents followed the requirements of section 942 of the Code of Civil Procedure and provides: “The said principals and said sureties, do further jointly and severally undertake and promise . . . that if the said judgment appealed from, or any part thereof, be affirmed, or the appeal be dismissed, the said defendants and appellants will pay the amount directed to be paid by the judgment . . . and all damages and costs which may be', awarded against said appellants herein upon such appeal [and] that if the said appellants and defendants do not make such payment within thirty (30) days after the filing of the remittitur ... in the court from which the appeal is taken, judgment may be entered upon the motion of said plaintiff and respondent, in its favor, against the undersigned sureties for such amount of said judgment, together with the interest that may be due thereon, and the damages and costs that may be awarded against said appellants upon the appeal.”

Although sureties upon such a bond became parties to the original action (Hawley v. Gray Bros. etc. Co., 127 Cal. 560 [60 Pac. 437]; Hogan v. Loclce-Paddon, 91 Cal. App. 606 [267 Pac. 392]), their position is not the same as that of the defendants. When the judgment becomes final it cannot be executed against them without further proceedings. They are not entitled to notice of subsequent steps in the proceedings and have no right to participate in them. By signing an undertaking upon appeal, a surety consents that judgment may be entered against him on motion for the amount of the judgment as affirmed (Gray v. Cotton et al., 174 Cal. 256 [162 Pac. 1019]), and he becomes a party to the action for the limited purpose of giving the court, jurisdiction to render and enforce a judgment against him (Meredith v. Santa Clara Min. Assn, of Baltimore, 60 Cal. 617). In effect, the bond is a stipulation for judgment upon a certain contingency. The general rule is that a consent to the entry of judgment expires after the payee’s remedy becomes barred by the statute of limitations (First Nat. Bank v. Terry, 103 Cal. App. 501 [285 Pac. 336]; First Nat. Bank v. Mock, 70 Colo. 517 [203 Pac. 272] ; annotation 21 A. L. R 774), and the liability of a surety cannot be enforced by the summary proceeding of a judgment ren- . dered upon motion when an action could not be maintained upon the bond. Neither remedy is exclusive (3 Am. Jur. 775, 776), but the same limitation of time applies to each.

The obligation of the sureties is upon the undertaking, an instrument in writing, not upon the judgment. Liability upon such an undertaking accrues from the affirming of the judgment to which it relates and is barred four years thereafter. (Crane v. Weymouth, 54 Cal. 476; Clark v. Smith, 66 Cal. 645 [4 Pac. 689, 6 Pac. 732]; Howard Ins. Co. of N. Y. v. Silverberg, 89 Fed. 168; see. 337, Code Civ. Proc., 16 Cal. Jur. 438, 484.) Notice of the motion to enter judgment against the sureties was given more than four years after the remittitur was filed in the superior court, and the motion was, therefore, properly denied.

The order is affirmed.

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


text:
    [Sac. No. 5028.
    In Bank.
    January 20, 1938.]
    FRANK MENGHETTI, Appellant, v. A. W. DILLON et al., Respondents.

      Griffin & Boone and Edward T. Taylor for Appellant.
    Brown & Chamberlain for Respondents.
   THE COURT.

This is a controversy based upon allegations that personal property upon which execution had been levied under a justice’s court judgment for $229.80 was the property of the judgment debtor, notwithstanding a verified third party claim thereto by the other defendant, because a transfer or pledge thereof as security, claimed by defendants to have been made more than seven months before the levy, was not preceded by the recordation of notice of intention to transfer or assign, as required by the provisions of section 3440 of the Civil Code of the State of California. Plaintiff filed an equity action in the superior court, praying that defendants “be adjudged to apply the . . . property to the payment of the judgment’’ etc., and “that defendants be enjoined from selling, transferring, assigning or interfering with said property . . . pending judgment’’.

Issue was joined in the instant case and it went to trial. . A decision in favor of plaintiff seems to have been rendered by the judge then in office but neither findings nor judgment thereon were signed. Approximately six years after the complaint was filed the case was again brought to trial before the successor of the first judge. Immediately preceding- the second trial a supplemental answer of the transferee defendant was filed alleging foreclosure, sale and delivery of the property to another under a lien for services, labor and skill for the improvement and safekeeping thereof and the incidental costs and charges. The second trial resulted in judgment in favor of defendants and plaintiff appealed, filing a judgment roll transcript in December, 1935.

No "brief having been filed up to October, 1936, plaintiff was ordered by this court to show cause why the appeal should not be dismissed for want of prosecution. There being no appearance on the day fixed in the order the appeal was ordered dismissed, but two weeks thereafter, upon joint request and stipulation of counsel for the respective parties, the order was vacated and thirty days was allowed appellant to file brief. On September 30, 1937, brief being still unfiled, another order of the same nature was issued and in response thereto the joint brief of the parties and a stipulation to submit the cause thereon were filed. On the calling of the order to show cause, the appeal was submitted for decision, pursuant to the stipulation.

In the brief appellant argues that some of the findings of fact are inconsistent with other findings, that one of the conclusions of law is inconsistent with the code requirement for advertising above cited, and that the conclusions of law are not supported by the findings of fact. Instead of applying in the trial court within the statutory time for correction of these claimed inconsistencies and insufficiencies by invoking the broad powers of the trial judge under section 662 to change or add to the findings, or under section 663 to enter another and different judgment, appellant now urges his highly technical points on appeal and asks a reversal of the judgment.

‘ ‘ Findings are to be read and considered together and liberally construed in support of the judgment and if possible are to be reconciled so as to prevent any conflict upon material points.” (Murray v. Tulare Irr. Co., 120 Cal. 311 [49 Pac. 563, 52 Pac. 586]; Ames v. City of San Diego, 101 Cal. 390 [35 Pac. 1005].)

In “an appeal upon the judgment roll alone the findings are conclusively presumed to be supported by the evidence; furthermore, it is also elementary that they are to receive, if possible, such a construction as will uphold rather than defeat the judgment thereon. They are to be liberally construed and if possible any ambiguity or inconsistency will be resolved in favor of sustaining the judgment.” (Ochoa v. McCush, 213 Cal. 426 [2 Pac. (2d) 357]; see, also, Estate of Berry, 195 Cal. 354 [233 Pac. 330]; Paine v. San Bernardino Valley Traction Co., 143 Cal. 654 [77 Pac. 659]; Gould v. Eaton, 111 Cal. 639, 644 [44 Pac. 319, 52 Am. St. Rep. 201]; Warren v. Hopkins, 110 Cal. 506 [42 Pac. 986]; Breeze v. Brooks, 97 Cal. 72 [31 Pac. 742, 22 L. R. A. 257].) Some of the cases in which this rule has been followed by the several District Courts of Appeal of California are: Stockton Morris Plan Co. v. Carpenter, 18 Cal. App. (2d) 205 [63 Pac. (2d) 859]; Hartford v. Pacific Motor T. Co., 16 Cal. App. (2d) 378 [60 Pac. (2d) 476]; Smalley v. Mountain States Life Ins. Co., 1 Cal. App. (2d) 747 [37 Pac. (2d) 498]; Swing v. Lingo, 129 Cal. App. 518 [19 Pac. (2d) 56.]

Applying the foregoing rules to the findings and judgment presented in the judgment roll herein, we conclude that the judgment is fully sustained.

We are also satisfied from a view of the whole case as presented in the transcript (including the opinions of the two trial judges, which, while not properly a part of the record, supply a recital of facts not otherwise presented), that there was no miscarriage of justice in the judgment appealed from. On the contrary it is apparent because of the great lapse of time since the transfer under attack occurred, that a reversal of the judgment would work a grave injustice upon respondents. Because of the inaction of respondents, however, when they might have brought the case on for hearing or forced a dismissal of this appeal, we do not feel that they should recover costs on appeal.

The judgment is affirmed, without costs.

Rehearing denied.


text:
    [S. F. No. 15813.
    In Bank.
    January 20, 1938.]
    EDITH WILBUR, Appellant, v. DONOHOE KELLY BANKING COMPANY (a Corporation) et al., Respondents.

      W. G. Deal, W. H. Metson and P. H. McCarthy, Jr., for Appellant.
    Luther Elkins, Tinning & De Lap and T. H. De Lap for Respondents.
   WASTE, C. J.

Respondent moves to dismiss the several appeals here pending.

The action is one to quiet title. An unraveling of the confusion now prevalent in the cause discloses that plaintiff filed a timely notice of appeal from a judgment quieting defendants’ title and from the order denying her motion for new trial. The order is nonappealable and the purported appeal therefrom will be disposed of accordingly. It appears from the various papers offered in support of the motion to dismiss that appellant neglected and failed to file, seasonably or otherwise, any request for a record to be used on the appeal from the judgment. Nevertheless, and in the absence of the pendency of any proceedings for a record, the respondents, out of an abundance of caution or because of confusion, moved the trial court for an order “dismissing” all proceedings for the preparation of a record to be used on appeal and “dismissing all proceedings in said court on any appeal in the above entitled action”. The order granting the requested relief followed substantially the language quoted from the motion requesting the same. Plaintiff duly noticed an appeal from the latter order and seasonably requested that a transcript be made up in support thereof. At this point, it should be stated that the motion and order last mentioned were undoubtedly intended merely to terminate proceedings for a record to be used on the principal appeal (though, as stated, no such proceedings had been instituted) and did not, as appellant incorrectly concludes from the peculiar language quoted therefrom, undertake to work a dismissal of her appeal from the judgment, a function without the jurisdiction of the trial court.

Shortly after appellant had noticed her appeal from the order terminating proceedings for a record, and after she had requested a transcript to be used on the latter appeal, the clerk and trial judge certified a transcript not only of the proceedings on the motion to terminate but a transcript of the entire trial record; that is to say, there has been certified and filed herein a copy of the judgment roll and of the testimony and proceedings upon the trial of the cause and upon the motion to terminate.

Approximately seven months after the filing herein of this complete transcript, the respondents noticed this motion to dismiss and offered in support thereof certain certificates of the clerk and trial judge in which they averred that they had respectively certified to the clerk's transcript of the judgment roll and to the reporter’s transcript of the trial proceedings solely in connection with the second and later appeal from the order terminating proceedings. It is obvious that the clerk’s transcript of the judgment roll and the reporter’s transcript of the trial proceedings are unnecessary to and may not be employed in connection with the later appeal from the order terminating proceedings for which it is asserted they were certified. The disclosed “intention” in certifying to those transcripts for such later appeal is typical of the confusion that runs all through this cause. Aside from this, and in line with our policy to dispose of appeals on their merits, whenever possible, we are of the view that the certified transcripts now before us should be considered in connection with the principal appeal from the judgment to which they are pertinent.

Our conclusion makes the appeal from the order terminating proceedings moot and it will be disposed of accordingly. In view of this we find it unnecessary to consider respondents’ arguments directed at said appeal.

' For the foregoing reasons, the appeals from the orders denying new trial and terminating proceedings for a record are, and each is, dismissed. The motion to dismiss the appeal from the judgment is denied, the time for briefs therein dating from the filing hereof.

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


author:
NOURSE, J., pro tem.
     SEAWELL, J., Dissenting.

text:
    [L. A. No. 16144.
    In Bank.
    January 20, 1938.]
    ETHEL LUCAS, Respondent, v. CITY OF LOS ANGELES (a Municipal Corporation), Appellant.

      Ray L. Chesebro, City Attorney, F. von Schrader, Assistant City Attorney, and Albert E. Wheatcroft and Bourke Jones, Deputies City Attorney, for Appellant.
    F. Bert Fernhoff, City Attorney (Oakland), and John W. Collier, Assistant City Attorney, as Amici Curiae, on Behalf of Appellant.
    William S. Scully and Patterson & Montgomery for Respondent.
    William H. Hollander, as Amici Curiae, on Behalf of Respondent.
   NOURSE, J., pro tem.

Plaintiff was a guest passenger in an automobile as it was being driven across a street intersection on its right side of the street, at a lawful rate of speed and in response to a mechanical “Go” signal. In the middle of the intersection a police automobile of defendant municipal corporation, operated upon authorized emergency business, traveling at a high rate of speed and disregarding the traffic “Stop” signal, crashed into it. Plaintiff, injured in the accident, was awarded damages of $2,000 against defendant upon trial before a jury. Defendant appeals.

There is no material dispute in the facts. The parties agreed that the police ear was an emergency vehicle responding to an emergency call at the time of the collision. Numerous witnesses testified that the siren was sounded continuously from three hundred to five hundred feet on its approach to the intersection. The operator of the car heard the siren and saw the car’s approach in ample time to have either stopped or changed his course to avoid the collision. He thought he could beat the police car across the intersection, and increased his speed. The respondent does not contend that the siren was not sounded. For these reasons we must consider the case as one in which the statutory warning was given.

The single question of law involved on this appeal is whether the municipality is liable in damages under these circumstances through the provisions of section 171414 of the Civil Code as in effect at the time of the collision. Our conclusion that it is not liable rests upon our interpretation of the statutes based upon the rule of Balthasar v. Pacific Elec. Ry. Co., 187 Cal. 302 [202 Pac. 37, 19 A. L. R. 452].

The Balthasar case required an interpretation of section 20 (m) of the old Vehicle Act (Stats. 1917, p. 402) which read in part: “Police patrol wagons, . . . fire engines and fire apparatus . . . shall have right of way with due regard to the safety of the public; but this provision shall not protect the driver . . . from the consequence of the arbitrary exercise of this right.” Section 132 of the act, as amended by Statutes 1929, page 542, which was in effect when the accident involved herein occurred, used substantially the same language. Section 120, which was amended at the same time, read: “The provisions of this act regulating the speed of vehicles shall not apply to authorized emergency vehicles as defined in this act when such vehicles are being operated in the chase or apprehension of violators of the law. . . . The provisions of this section shall not, however, relieve the driver . . . from the duty to drive with due regard for the safety of all persons using the highway nor shall it protect the driver of any such vehicle from the consequence of an arbitrary exercise of the privileges declared in this section.” The provisions of section 20 (m) and 132 were carried into section 554 of the Vehicle Code (Stats. 1935, p. 187) ; those of section 120 were carried into section 517, page 180, of that code.

When the Balthasar case was decided in 1921 the statute did not contain the specific exceptions as to speed regulations herein noted, but this court held nevertheless that (p. 308, supra) “It follows that the general rules of the road relating to speed and to the turning of corners contained in the Motor Vehicle Act do not apply to fire or police apparatus. We have only to consider the utter absurdity of requiring peace officers to observe the arbitrary speed limits fixed by the Motor Vehicle Act when pursuing criminals, who may be fleeing in high-power cars at twice the legal limit, to make manifest that the legislature did not have in view such a limitation on peace officers. And it is equally clear that they did not contemplate retarding the speed of fire apparatus in going to a fire. ’ ’ Cases were there cited holding that, because of the manifest necessity of enabling the public bodies to function for these purposes, statutes which may appear uncertain in this respect will be held either to contain an implied exception of the public or will be held unreasonable and void.

Since this plain declaration was made the legislature has met in eight regular sessions at each of which the Vehicle Act was either amended or revised, or enacted into a complete new code. In none of those numerous changes has any amendment or revision been made of the particular sections here involved which would to the least degree alter the rule of the Balthasar case. To the contrary the amendments have adopted that rule and emphasized the legislative purpose to follow it. In November, 1933, Armas v. City of Oakland, 135 Cal. App. 411 [27 Pac. (2d) 666, 28 Pac. (2d) 422], was decided, and in July, 1934, Tuten v. Town of Emeryville, 139 Cal. App. 745 [35 Pac. (2d) 195], was decided. Both followed the rule of the Balthasar case and both emphasized the necessity of holding these vehicles exempt from the rules of the road applicable to motorists generally. Two sessions of the legislature have followed these decisions without any statutory change in that respect.

Respondent relies upon Rogers v. City of Los Angeles, 6 Cal. App. (2d) 294 [44 Pac. (2d) 465], and Lossman v. City of Stockton, Idem, p. 324 [44 Pac. (2d) 397] and states that they are the only two cases where the court rightfully had the construction of the statute before it. The first went off on the question of contributory negligence, while the second refused to follow the rule of the Balthasar case because of changes in the statute, which we will show herein to have been immaterial. Though these and other decisions have been rendered casting some confusion on the subject, this court has never departed from the rule. We see no reason for departing from it at this time and thereby establish a new rule of liability when the legislature has refused to do so. The question involved is really a simple one, because it calls for nothing more than a judicial recognition of the power of the legislature to determine what is or is not actionable negligence under certain circumstances. These rules of the road applicable to ordinary motorists are but legislative declarations of what is reasonable and prudent as opposed to what would be negligence. Thus a man will drive down the right side of a public highway not alone because the statutes say he must, but because, through long-established practice and custom, that has become the method of operation assumed by the prudent and reasonable person, which is the test of due care as distinguished from negligence. That the legislature may in its wisdom change these rules and establish a new or different degree of care cannot be disputed.

In the Armas case, upon the sounding of the siren, two street cars in obedience to law stopped at a street intersection and six or eight autos, also in obedience to the law, stopped at the same intersection, completely blocking traffic from the center of the street to the right-hand curb. The driver of the fire truck seeing this condition turned to his left and passed on the left side of the two standing street cars. The deceased walked out in front of one of these cars and was hit by the truck. The only grounds of negligence charged were excessive speed and passing to the left of the street cars. It was there held, in reference to the matter of speed, that there was no negligence in accordance with the express provisions of section 120 of the California Vehicle Act that “The provisions of this act regulating the speed of vehicles shall not apply to authorized emergency vehicles . . . traveling in response to a fire alarm ...” It was also held in accordance with the rule of the Balthasar case that the driver was not subject to the rules of the road in reference to passing to the left of a street car. There was, therefore, no negligence and no right of recovery against the city because under section 1714% of the Civil Code the city’s liability rested solely upon the “negligent operation” of the vehicle. This holding was amplified by the statement, also taken from the Balthasar case, that any other ruling would be absurd and unreasonable because it would render impossible the operation of those vehicles for the emergencies for which they were designed. As an illustration of the necessity of the rule herein adhered to, that case is a better illustration than the instant ease. There the street was blocked by cars following the express demands of the statute. No course was open to the fire truck except to the left of the street cars. The statutes declared that the driver was privileged to take that course. The jury, long after the fire was extinguished, held that he was not. Thus we say the question is a simple one— may the legislature under its police power enact rules of conduct, or is that function left to the court or jury 1

The Tuten case followed the Armas case upon the same rule of the Balthasar ease. That was a case where the deceased was struck when in the middle of the highway by a police motorcycle which at the time was chasing a violator of the law. The.charge of negligence there was the excessive speed of the police vehicle. The ruling was merely that the statute declared that these speed regulations were not applicable to a case of that kind, and that, under the rule of the prior decisions, there was no actionable negligence.

Another holding in the Armas case which was supported by the ruling of the Balthasar case was that, since section 1714% of the Civil Code created a new liability, it must be strictly construed. This has been ruled, in many cases decided both before and after that one. , (See Cook v. Superior Court,, 12 Cal. App. (2d) 608 [55 Pac. (2d) 1227]; Weber v. Pinyan, 9 Cal. (2d) 226 [70 Pac. (2d) 183, 112 A. L. R. 407].) This section was chapter 260 of the Statutes of 1929. Chapter 263 of the same statutes exempted policemen and firemen from all liability “for any act” arising out of the operation in line of duty and upon an emergency call. Chapter 253 of the same statutes added section 8% to the Vehicle Act defining an authorized emergency vehicle. Section 120 of the Vehicle Act, and a part of this chapter 253, added a new provision declaring that the release of such vehicles from the speed regulations shall not “protect the driver of any such vehicle from the consequence of an arbitrary exercise of the privileges declared in this section”. Section 132 of the same chapter exempted emergency vehicles from the right-of-way provisions of the act, but contains the same provision as to an arbitrary exercise “of such right-of-way”.

All these sections must be read together and construed together because they all relate to the same subject-matter. The first imposes a new liability on the state and its public agencies for ordinary negligence in the operation of any motor vehicle. The second exempts all members of the fire and police departments from liability for damage for any act in line of duty. Section 120 of the Vehicle Act exempts the driver from all the restrictions of the act relating to speed, while section 132 expressly grants these vehicles a clear right-of-way and requires all other vehicles to yield to them.

A simple analysis of these statutory provisions discloses the clear intention of the legislature to recognize the paramount necessity of providing a clear and speedy pathway for such vehicles when actually confronted with the emergency in which the entire public may be assumed to be concerned. The expression “with due regard for the safety” of all persons using the highway was explained in the Balthasar case where the court said (p. 311) : “It is evident that the right of way of fire apparatus over other vehicles is dependent upon ‘due regard to the safety of the public’ only in so far as such ‘due regard’ affects the person required to yield the right of way. Notice to the person required to yield the right of way is essential, and a reasonable opportunity to stop or otherwise yield the right of way necessary in order to charge a person with the obligation fixed by law to give precedence to the fire apparatus.” This is the only reasonable interpretation that the statute will bear. If the driver of an emergency vehicle is at all times required to drive with due regard for the safety of the public as all other drivers are required to do, then all the provisions of these statutes relating to emergency vehicles become meaningless and no privileges are granted to them. But if his ‘ ‘ due regard” for the safety of others means that he should, by suitable warning, give others a reasonable opportunity to yield the right of way, the statutes become workable for the purposes intended.

The expression “arbitrary exercise of the privileges” has also caused some confusion. Since the vehicles are excluded from the restrictions of speed and right of way, negligence cannot be predicated on those elements if proper warning has been given. These are among the “privileges” which are granted by the statutes. An arbitrary exercise of them may rest upon the question whether an emergency in fact existed. The statute has determined this question in part by the limitation in section 120 to cases where the emergency vehicle is engaged in the chase of violators of the law or in response to a fire alarm. Members of the fire and police departments are relieved from civil liability when “responding to an alarm of fire or an emergency police call”. Thus, if such a vehicle is being operated in response to a fire alarm, excessive speed alone is not an arbitrary exercise of these privileges. If these privileges were exercised in returning from a fire, or for some private purpose of the operator, it might be a ease of an arbitrary exercise of them. Such is the effect of the rulings in Hopping v. Redwood City, 14 Cal. App. (2d) 360 [58 Pac. (2d) 379], and Von Arx v. Burlingame, 16 Cal. App. (2d) 29 [60 Pac. (2d) 305], where the facts disclosed that the public vehicles were not being operated in response to emergency calls at the time the injuries were inflicted. In David’s “Municipal Liability for Tortious Acts and Omissions”, page 141, the author advances the view that “the practical purpose of this phrase was to cover the cases in which the authorized emergency vehicle is not en route to the bedside of the sick man, the scene of the crime or the location of the fire; but where the drivers, by virtue of the character of the vehicle and by use of its siren, maintain non-necessary speeds and drive with abandon of the usual rules of the road, when there is no need. This is the case where the fire engine is returning from the fire, in the absence of any new call or emergency; where the engine of the motor vehicle is being warmed up or tested; when the policeman is making routine runs with no criminal in sight or immediate contemplation.” To the instances there noted where this limitation might apply could be added one where the operator has given the required warning but sees that another has not heard or heeded it; under those circumstances it might be an arbitrary exercise of the privileges to continue on into an inevitable collision. This situation might raise an issue of fact similar to that involved under the last clear chance doctrine; the negligence of the operator of the emergency vehicle would then rest solely upon his arbitrary exercise of his privileges and not upon his disregard of the ordinary speed and right of way restrictions.

Another view of the meaning and application of this expression is that it is similar to the charge of “wilful misconduct” in the ordinary guest cases. That expression has been defined in many cases which are cited in the recent opinion of this court in Weber v. Pinyan, supra. In that opinion we quoted with approval the statement in Helme v. Great Western Milling Co., 43 Cal. App. 416, 421 [185 Pac. 510], where the court said: “ ‘Wilful misconduct’ means something different from and more than negligence, however gross. The term serious and wilful misconduct’ is described by the supreme court of Massachusetts as being something ‘much more than mere negligence, or even gross or culpable negligence ’, and as involving ‘ conduct of a quasi criminal nature, the intentional doing of something either with the knowledge that it is likely to result in serious injury, or with a wanton and reckless disregard of its possible consequences’. {In re Burns, 218 Mass. 8 [Ann. Cas. 1916A, 787, 105 N. E. 601].) ” The power of the legislature to relieve the owner from ordinary negligence in a guest case has been frequently affirmed; but such power in relation to private owners is no greater than that in relation to a public owner. The effect of this provision of the statute is that, when the public is made liable only in cases of “arbitrary” conduct on the part of the operator, it is, like the private owner in a guest ease, relieved from liability for ordinary negligence. At this point arises the sole question of fact (aside from the question whether the siren was sounded) as to appellant’s liability which the jury in the instant case could have determined if it had been raised in this proceeding—i. e., was there an arbitrary exercise of these privileges? These “privileges” are granted by the legislature and are not to be determined by the court or jury. If by judicial decree the nonarbitrary exercise of these privileges may be declared to be negligence, then the whole purpose of the statutes is lost and the private opinions of the jurors are substituted for the solemn determination of the legislature upon a subject which is clearly one which that body may determine in its discretion. It has always been the law that, when a subject-matter is purely legislative, the courts will not decry the wisdom or policy of the enactment because they are not in accord with the views of the law-making body. This fixed policy of the courts may not be set aside indirectly by declaring that there was some question of fact involved before the jury, or that there was some conflict in the evidence.

Some confusion has also arisen over the use of the expression in section 132 and similar statutes requiring operators of these vehicles to “sound audible signal by siren '. Section 554 of the Vehicle Code has clarified this somewhat by using the language: “Upon the immediate approach of an authorized emergency vehicle giving audible signal by siren.” It will be noted that it is the sounding or the giving of audible signal that fixes the right of way and relieves the driver of negligence. Where there is dispute as to whether the party injured heard the signal it is a question of fact to be determined by the jury, but only in so far as that is material to the issue of his contributory negligence. The statutes are clear that when an audible signal is given the operator of the emergency vehicle has a clear right of way. The giving of the signal is the measure of care on his part, and if this is done his duty of care is performed, subject to the limitation as to “arbitrary” conduct as hereinbefore noted.

Our conclusions from the foregoing are that when the operator of an emergency vehicle responding to an emergency call gives the statutory notice of his approach the employer is not liable for injuries to another, unless the operator has made an arbitrary exercise of these privileges. In such cases speed, right of way, and all other “rules of the road” are out of the picture; the only questions of fact, in so far as the public owner is concerned, are first, whether there was an emergency call within the terms of the statute; second, whether the statutory warning was given, and third, whether there was an arbitrary exercise of these privileges. Here the emergency was conceded, the sounding of the siren was proved by the only substantial evidence offered, and an arbitrary exercise of the privileges has not been shown.

The judgment is reversed.

Shenk, J., Curtis, J., Edmonds, J., and Waste, C. J., concurred; Houser, J., concurred in the judgment.

SEAWELL, J., Dissenting.

I dissent. The majority opinion is predicated upon the premise that the siren of the defendant’s emergency vehicle was properly sounded as required by law. The jury impliedly found it was not, and this finding is amply supported. Negative testimony of the kind here involved has frequently been held to create a substantial conflict in the evidence. The opinion as written improperly weighs the evidence.

In addition it is my opinion that the majority decision incorrectly interprets the provisions of law involved, and fails to give effect to the obvious legislative policy therein embodied. I am of the opinion that section 17141/2, Civil Code, by its clear and unequivocal language imposes liability on governmental agencies for injuries to third persons arising out of the use and operation of all motor vehicles, whether being used in the performance of a governmental or proprietary function, and that neither that section nor any other statutory provision expressly or impliedly exempts governmental agencies from liability for torts growing out of the use and operation of authorized emergency vehicles. The exemption from certain provisions of the Vehicle Code conferred on emergency vehicles merely makes the liability in each case a question of fact, the arbitrary speed limit and right of way provisions not being applicable. In this connection I am satisfied to rest my opinion on the reasoning of the appellate court in Rogers v. City of Los Angeles, 6 Cal. App. (2d) 294 [44 Pac. (2d) 465], and Lossman v. City of Stockton, 6 Cal. App. (2d) 324 [44 Pac. (2d) 397], I am convinced that those cases correctly interpret the statutory provisions involved.

Rehearing denied.


author: SHENK, J.

text:
    [S. F. No. 15892.
    In Bank.
    January 26, 1938.]
    WESTERN MACHINERY COMPANY (a Corporation), Respondent, v. BANKERS INDEMNITY INSURANCE COMPANY (a Corporation), Appellant.
    Charles B. Morris and Leo J. McEnerney for Appellant.
    Arthur P. Shapro and Alfred C. Skaife for Respondent.
    P. J. Murphy, M. Mitchell Bourquin, C. Ray Robinson, James D. Garibaldi, Willard B. Treadwell, A. B. Biarichi, Augustin Donovan, Bianchi & Hyman, Fitzgerald, Abbott & Beardsley, Harold M. Child and David E. Peckinpah, as Amici Curiae, on Behalf of Respondent.
   SHENK, J.

Western Machinery Company recovered a judgment against the defendant, Bankers Indemnity Insuranee Company in the sum of $1350 on an insurance policy issued by the defendant indemnifying the plaintiff against liability for accidental bodily injuries or death or for property damages by reason of the ownership of the automobiles described in the policy. One Lawton was injured while riding in an automobile operated by one of the plaintiff’s employees. The liability of the defendant was not questioned unless, under the undisputed facts, the carriage of Lawton in the plaintiff’s automobile at the time was excluded from coverage by the declaration contained in the policy that the automobile would not be used to carry passengers for a consideration, actual or implied. There was also involved the question whether the use of the automobile at the time was a permitted business use under the policy provisions. The defendant has appealed from the judgment.

The only questions are whether the court correctly found and concluded that Lawton was not a passenger for a consideration within the meaning of the policy and that the automobile was being put to a use permitted by the policy, namely, for making a call in connection with the business of the plaintiff.

One of the insured’s declarations forming a part of the policy was that “none of the insured automobiles are or will be used to carry passengers for a consideration, actual or implied”. The plaintiff’s business was designated in the policy as that of “machinery”. Another item of the declarations was that the automobiles covered would be used for “business and pleasure”, and defined that phrase as “personal, pleasure and family use, including business calls”.

Lawton was being transported by the plaintiff’s representative from San Francisco to Kyburz, where Lawton inspected some machinery which the plaintiff was offering for sale to Lawton's employer, the Union Paving Company. An accident occurred on the return trip through the negligence of the driver which resulted in injuries to Lawton. The Union Paving Company subsequently bought the machinery which Lawton had inspected. No monetary or other valuable return for the transportation of Lawton was made to the plaintiff.

The position of the defendant is that inasmuch as Lawton was not a “guest” within the meaning of the provisions of section 141% of the California Vehicle Act (Stats. 1923, p. 517, now sec. 403, Vehicle Code, Stats. 1935, p. 154), prohibiting the recovery by a person injured through the negligence of his host, he necessarily became a passenger for a consideration within the meaning of the policy provision. The defendant seeks an interpretation of the word ‘ consideration” used in the policy clause, as any “compensation” which is “given for the ride” within the provisions of the Vehicle Code.

The decisions in such cases as Walker v. Adamson, 9 Cal. (2d) 287 [70 Pac. (2d) 914], and Haney v. Takakura, 2 Cal. App. (2d) 1 [37 Pac. (2d) 170], interpreting statutory provisions, make no addition to the law applicable in the interpretation of insurance policies, which is restated in the cases hereinafter cited and does not require repetition here. (See, also, Worswick Co. v. Industrial Acc. Com., 181 Cal. 550, 560 [185 Pac. 953]; 14 Cal. Jur., pp. 443 et seq.) No pertinent authority has been cited from this state on the question of when an automobile is “used to carry passengers for a consideration, actual or implied” as that phrase is employed in insurance policies; but the language has been interpreted in other jurisdictions.

In Dahl v. Moore, 161 Wash. 503 [297 Pac. 218], the Supreme Court of Washington held that the plaintiffs, who were riding in the defendant Moore’s car for the purpose of inspecting real estate offered for sale by Moore’s employer, were not gratuitous passengers but were entitled to recover damages for injuries suffered through Moore’s ordinary negligence. The rule in that state was that gratuitous passengers could not recover for the ordinary negligence of their host. A subsequent action brought to recover on Moore’s policy of insurance presented the question whether the automobile under the circumstances was being “used in the carriage of passengers for a consideration, express or implied”. The same court held that the facts did not constitute a carriage of passengers for a consideration. It also held that the use then being made of the automobile was a “business” use as defined in a policy designating the business of the assured as “real estate”, and permitting business uses (Central Surety & Ins. Corp. v. London & Lancashire Indemnity Co. of America, 181 Wash. 353 [43 Pac. (2d) 12].)

In Ocean Accident & Guarantee Corp. v. Olson, 87 Fed. (2d) 465, in discussing a similar clause, the court said that “the word ‘consideration’ in the policy clearly is limited to compensation for use of the car”. It concluded that under the facts there presented the contribution to the expense of the trip had no relation to payments for use of the ear. Supporting authority was found in Park v. National Casualty Co., 222 Iowa, 861, 270 N. W. 23, wherein a similar disposition of the question was made.

In Marks v. Home Fire & Marine Ins. Co., 285 Fed. 959 [52 App. D. C. 225], where there was involved a condition which nullified the policy if the automobile was used in carrying passengers for compensation, the word “passenger” was defined as one who was carried for a fare by some established or public conveyance. (See, also, note 14 A. L. R, at p. 205, and cases cited; Huddy Encyclopedia of Automobile Law, p. 150; Maringer v. Bankers Indemnity Ins. Co., 288 Ill. App. 335 [6 N. E. (2d) 307, 311]; Arms v. Faszholz, (Mo. App.) 32 S. W. (2d) 781, 782.) The Supreme Judicial Court of Massachusetts, however, rejected such a definition in a case involving a declaration that the automobile would not be used for carrying passengers for a consideration, and held that where the accident occurred during a single instance of carrying a passenger for a valuable consideration the insurer was exonerated from liability. (Sleeper v. Massachusetts Bonding & Ins. Co., 283 Mass. 511 [186 N. E. 778]; see, also, American Lumbermen’s Mut. Casualty Co. of Illinois v. Wilcox, 16 Fed. Supp. 799; Neilson v. American Mut. Liability Ins. Co. of Boston, 111 N. J. L. 345 [168 Atl. 436].)

Then in Jasion v. Preferred Acc. Ins. Co., 113 N. J. L. 108 [172 Atl. 367], an invitee, who was being transported on a trip the purpose of which was to inspect a cow with the object of purchasing it, was held not to be a passenger under the terms of a policy excluding use of the commercial vehicle described therein to carry passengers regardless of whether a consideration was charged. It was the court’s opinion that the carriage of the plaintiff was incidental to the business at hand, which was held to be a permitted use under the policy, and that he was therefore not a passenger. This decision also supports the conclusion in the present case that the transportation of the insured’s prospective customer to inspect the machinery offered for sale was a business use of the vehicle permitted by the policy.

In Ocean Accident & Guarantee Corp. v. Torres, 91 Fed. (2d) 464, the injured person who recovered judgment had been assisting her employer in some household domestic service and was not therefore a guest under the applicable section of the California Vehicle Act. The Circuit Court of Appeals for the Ninth Circuit, dispelled the “dilemma”— that if the rider was not a guest precluded from recovery she was a fortiori a passenger for a consideration,—by applying the principle of the case of Malmgren v. Southwestern Automobile Ins. Co., 201 Cal. 29 [255 Pac. 512]. It stated: “As we have already seen, the Malmgren case, supra, holds that: ‘The substantive law of this state cannot be enlarged, circumvented, defeated, or modified by any provision which the insurer may have elected to place in its contract in derogation of or in conflict therewith. ’ Within the spirit of that decision, the appellee herein is a third party ‘for whose protection the law was adopted’, and she cannot ‘be hindered, delayed, or defeated by the private agreements of two of the parties to a triparty contract’.” No other ground for the court’s conclusion on that point was given, nor was any other authority cited in support thereof. It is true that the court referred to the act of 1919 (Stats. 1919, p. 776), which gives the injured person the conditional right to sue the insurer, as containing no “limitation that in order to recover, such injured person must not have been ‘ carried for a consideration’ ”. However, with the exception of the subject-matter there expressly covered, the act made such suit by the injured person otherwise “subject to” the “terms and limitations” of the policy. The Torres case also involved the question as to which the act of 1919 and the decision of the Malmgren case were directly applicable. In connection therewith the court noted the later case of Hynding v. Home Acc. Ins. Co., 214 Cal. 743 [7 Pac. (2d) 999, 85 A. L. R. 13], as approving the Malmgren ease. But it failed to note, in connection with the question now under consideration, that in the later case the Malmgren decision was rejected as not governing a matter which was not expressly covered by statute and which the act left subject to the agreement of the contracting parties. It is the Hynding case, therefore, which is pertinent and controlling on the question here whether the parties’ agreement as to the permissive uses is binding on the injured person. In the absence of any law declaring the obligation of the insurer in that respect, the conclusion is compelling that the injured person is bound by the limitations contained in the policy. Other cases hold that a breach of a declaration similar to that here involved constitutes a defense in an action by the injured person against the insurer. (Neilson v. American Mut. Liability Ins. Co. of Boston, supra; Orient Ins. Co. v. Van Zant-Bruce Drug Co., 50 Okl. 558 [151 Pac. 323].) However, on the question of the liability of the insurer under a similar declaration, the result in the Torres case is in harmony with the other cases reviewed herein on the facts there involved. Those decisions appear to be uniform at least on the question of what constitutes “consideration” as that word is used in insurance policies.

Cases such as Neilson v. American Mut. Liability Ins. Co. of Boston, supra, and Bleeper v. Massachusetts Bonding & Ins. Go., supra, do not aid the defendant. They involved a monetary consideration passing to the insured. The authorities interpreting the pertinent provisions in insurance policies under circumstances similar to those here involved are opposed to the defendant’s position.

It follows that, as contemplated by the policy, (1) the plaintiff was not using the automobile to carry passengers for a consideration, actual or implied; and (2) the carriage of Lawton to inspect the machinery of the plaintiff was a permissible business use of the automobile—and the rights of the parties are governed accordingly.

The judgment is affirmed.

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


author: SEAWELL, J.

text:
    [L. A. No. 16311.
    In Bank.
    January 26, 1938.]
    MARK F. JONES, Appellant, v. HUGH WILTON, Respondent.

      W. L. Englehardt and A. G. Divet for Appellant.
    A. P. G. Steifes for Respondent.
   SEAWELL, J.

Plaintiff appeals from a judgment entered for defendant on the ground that plaintiff’s claim to recover the sum of $20,000 was barred by the statute of limitations. The trial court rendered judgment for defendant on the theory that the action was brought too late for the reason that the amended complaint set up a new cause of action. Otherwise the amended complaint would be deemed filed as of the date of filing of the original complaint. (Work v. County Nat. Bank & Trust Co., 4 Cal. (2d) 532 [51 Pac. (2d) 90]; Bowman v. Wohlke, 166 Cal. 121, 128 [135 Pac. 37, Ann. Cas. 1915B, 1011]; Frost v. Witter, 132 Cal. 421, 427 [64 Pac. 705, 84 Am. St. Rep. 53]; 16 Cal. Jur. 547.)

We are of the view that the trial court erred in its holding that the amended complaint set forth a new cause of action. It is alleged in the original complaint that plaintiff, an attorney at law, performed legal services for defendant prior to September 5, 1928. On that date an account was stated between them, at which time defendant executed an agreement by which he promised to pay plaintiff $20,000 for such services. It is further alleged that* by said agreement defendant “promised, undertook and guaranteed” that said sum with interest at six per cent “would be paid to plaintiff on or before three years from and after September 5, 1928”. Nonpayment of any part of said sum and the suspension of the statute of limitations for a time by reason of defendant's absence from the state are also averred.

The amended complaint set forth the agreement of September 5, 1928, with greater particularity than the original complaint, and annexed a copy to the complaint. Instead of alleging the performance of legal services for defendant, it alleged the performance of such services for defendant and the Los Angeles Housing Corporation and the Gibraltar Title Company. Defendant executed the agreement for himself and as president of said two corporations. It is averred in the amended complaint that by the contract of September 5th defendant and the two corporations “agreed that they were indebted to the plaintiff in the sum of $20,000”. It is further alleged that they agreed to assign trust deeds to plaintiff in the aggregate sum of $50,000. They “jointly and severally undertook and agreed and guaranteed that the plaintiff would receive from said trust deeds the sum of $20,000” with interest “within thirty-six months from and after September 5, 1928”, and they jointly and severally guaranteed the payment of said $20,000 “irrespective of whether plaintiff received anything from said trust deeds”. The amended complaint further alleged that only one trust deed, a second lien in the principal sum of $10,000, had been assigned to plaintiff. The property subject thereto had been sold under foreclosure of the prior deed of trust, with the result that no part of the $20,000 nor interest had been paid.

The failure of defendant Hugh Wilton to perform the agreement of September 5, 1928, is the foundation of both the original and amended complaints. It is true that the original complaint alleges a prior indebtedness of defendant Wilton to plaintiff and the execution of the agreement of September 5th by plaintiff and Wilton, while the amended complaint alleges a prior indebtedness of Wilton and the two corporations of which he was president, and that the agreement of September 5th was between plaintiff and defendant and said two corporations. But the obligation as to payment in full of $20,000 upon a failure of plaintiff to realize payment through deeds of trust assigned to him was, by the terms of the contract of September 5th, joint and several, and hence Wilton could be sued singly. {Goff v. Ladd, 161 Cal. 257 [118 Pac. 792]; 20 Cal. Jur. 504, citing cases.) In view of this fact it cannot be held that the amended complaint set forth a new and different cause of action as to defendant Wilton by alleging that others than Wilton were parties to said agreement. {Lewis v. Adams, 70 Cal. 403 [11 Pac. 833, 59 Am. Rep. 423]; Ginsberg v. Faraone, 126 Cal. App. 337, 342 [14 Pac. (2d) 777]; 49 C. J. 817.)

Defendant contends that in the original complaint he is sued as a principal, whereas under the amended complaint he is as to a part of the indebtedness of $20,000 a guarantor. The theory of defendant is that the indebtedness fixed at $20,000 is the total of amounts severally owing from defendant and from the two corporations. There is nothing in the amended complaint to sustain this theory. The inference to be drawn therefrom is that all services were rendered to defendant and the two corporations jointly. While the contract used the word “guarantee”, it is used in the sense of an assurance of payment, rather than a promise to answer for the debt of another. Furthermore, even if the indebtedness of $20,000 represented the total of sums owing from the three parties individually, defendant himself argues that the contract of September 5, 1928, constituted a novation. Upon the execution of said contract defendant and the two corporations assumed primary liability, jointly and severally, for the full $20,000.

In support of his contention that the amended complaint states a new cause of action defendant relies on Rodgers v. Byers, 127 Cal. 528 [60 Pac. 42], and 1 Cal. App. 284 [81 Pac. 1123], It was held in said case that where an unconditional acknowledgment and promise to pay are made before the statute of limitations has run on a promissory note, an action brought after the time has run on the note is nevertheless upon the note, the effect of the acknowledgment being to continue liability on the note for the statutory period from the date of the acknowledgment. But where the acknowledgment and promise are conditional or qualified, the action must be brought on the new substituted promise. In the cited case it was held that where the original complaint alleged execution of the note and a general unqualified acknowledgment and promise to pay, and the amended complaint alleged execution of the note with a qualified promise of the debtor to pay when able, the amended complaint set forth a new cause of action which was barred when it was filed.

We have some doubts as to whether Rodgers v. Byers, supra, would now be followed in view of more recent decisions that the amended complaint may be deemed filed as of the date of the original complaint unless it sets forth a “wholly” or “entirely” different cause of action. (Frost v. Witter, 132 Cal. 421 [64 Pac. 705, 84 Am. St. Rep. 53]; Cowell v. Snyder, 171 Cal. 291 [152 Pac. 920]; Ginsberg v. Farone, supra; Mackroth v. Sladky, 27 Cal. App. 112 [148 Pac. 978]; Roullard v. Gray, 30 Cal. App. 757 [159 Pac. 457].) But conceding that said decision would be followed in a proper ease, it does not govern the instant case. Here both the original complaint and the amended complaint declare upon an account stated—an agreement fixing a balance of indebtedness and promising to pay it. An account stated constitutes a new contract, which supersedes the original contract. The action is upon said new contract. (Bennett v. Potter, 180 Cal. 736 [183 Pac. 156]; Partridge v. Butler, 113 Cal. 326 [45 Pac. 678]; Mitchell v. Fleming, 77 Cal. App. 241 [246 Pac. 152]; Klein-Simpson Fruit Co. v. Hunt, Hatch & Co., 65 Cal. App. 625 [225 Pac.. 14]; 1 Cal. Jur. 203.) It has been held that a debt upon a specialty, such £,s the promissory note in Rodgers v. Byers, supra, cannot form the basis of an action upon an account stated. (Bennett v. Potter, supra, at p. 745; Rio Linda Poultry Farms v. Frederickson, 121 Cal. App. 433 [9 Pac. (2d) 262].)

In the ease herein both complaints alleged an account stated by the written agreement of September 5, 1928. By the terms of the account stated, as said account is described in the original complaint, defendant “promised, undertook and guaranteed” that the sum of $20,000 “would be paid to plaintiff on or before three years from and after September 5, 1928”. The postponement of the time of payment was an integral part of the account stated. Such a postponement is valid. (Mitchell v. Fleming, supra; Young v. Lo Presti, 95 Cal. App. 79 [272 Pac. 310].) The amended complaint simply amplified the description of the instrument constituting the account stated by setting forth more fully its terms and the manner in which the $20,000 would be paid. (Wells v. Lloyd, 6 Cal. (2d) 70, 88 [56 Pac. (2d) 517]; Lovelace v. Free, 11 Cal. App. (2d) 370, 373 [54 Pac. (2d) 82]; De L'Eau v. Williams, 139 Cal. App. 116, 118 [33 Pac. (2d) 427]; Ginsberg v. Faraone, 126 Cal. App. 337, 342 [14 Pac. (2d) 777].)

Even under defendant’s theory, which seems to be that the account stated on September 5, 1928, was separate from and antecedent to the promise of payment contained in the contract of September 5th, said promise, as described in the original complaint, was not a general and unqualified promise within the rule of Rodgers v. Byers, supra, which would merely “continue” liability upon a prior obligation (the account stated) for the statutory period from the date of the promise. Said promise was qualified in that it postponed liability for payment until “three years from and after September 5, 1928”. (Mitchell v. Fleming, supra; Rodgers v. Byers, supra; Maurer v. Bernardo, 118 Cal. App. 290 [5 Pac. (2d) 36].) Under the rule of Rodgers v. Byers, supra, where an acknowledgment and promise are thus qualified, the action is brought on said new promise, rather than on the antecedent obligation.

Defendant further contends that notwithstanding the amended complaint is deemed filed as of the date of the original complaint the action is brought too late in any event. If, as plaintiff contends, the cause of action arose on September 5, 1931, then the action brought on October 1, 1935, is within the four-year period of limitation, since defendant was absent from the state for a time. But if the cause of action accrued on March 5, 1929, as defendant contends, the action was brought too late.

The purpose of the account stated on September 5, 1928, was to provide a method for payment of the preexisting indebtedncss, which method involved a postponement of the time for payment. Under said instrument it was contemplated that within thirty-six months from September 5, 1928, plaintiff would receive payment in full of the $20,000 owing, with interest, through collections upon deeds of trust to be assigned to him by defendant. But by said agreement defendant Wilton and the two corporations which were parties to the agreement jointly and severally “guaranteed” payment in full irrespective of whether plaintiff received anything from said assignments. Following the provisions which set forth the plan for payment through assignments of deeds of trust is the following paragraph:

“If, I, we or any of us, fail to deliver to you $50,000 worth in interest in first mortgages or trust deeds as above stated, on or before six months from the date hereof, then we agree to pay you upon your demand the sum of $20,000 together with interest thereon at the rate of 6% per annum from date hereof. ’ ’

The contingency referred to in this paragraph arose. The defendant failed to deliver to plaintiff trust deeds in the amount of $50,000. The period of six months from September 5, 1928, expired on March 5, 1928, on which date, defendant contends, the statute of limitations commenced to run. Plaintiff contends that this provision is in the nature of an acceleration clause. If the creditor fails to act affirmatively to mature the indebtedness, the statute of limitations is not set in motion. This is the rule notwithstanding the acceleration clause is positive, rather than optional, in terms. Thus notwithstanding the acceleration clause provides that the obligation shall be due and payable “immediately” or “at once”, it is held that the clause is not self-operative; that it is for the benefit of the creditor, and the default cannot be taken advantage of by the debtor to mature the indebtedness. (Belloc v. Davis, 38 Cal. 242 [48 Pac. 72]; Mason v. Luce, 116 Cal. 232, 233 [48 Pac. 72]; Richards v. Daley, 116 Cal. 336 [48 Pac. 220]; Andrews v. Zook, 125 Cal. App. 19 [13 Pac. (2d) 518]; Stewart v. Claudius, 19 Cal. App (2d) 349 [65 Pac. (2d) 933].) This rule is not confined to promissory notes. (Stewart v. Claudius, supra; Congregational Church Bldg. Soc. v. Osborn, 153 Cal. 197 [94 Pac. 881].)

We are of the view that the contention of plaintiff must be upheld. Here September 5, 1931, was fixed as the date when payment in full was required upon the account stated on September 5, 1928, with the optional right in the creditor to declare the indebtedness due at the end of six months if deeds of trust as provided for were not transferred to him. Plaintiff never exercised this option. Hence the statute of limitations did not start to run until September 5, 1931, and the action is brought in time.

The judgment for defendant is reversed.

Shenk, J., Curtis, J., Edmonds, J., Langdon, J., Nourse, J., pro tem., and Waste, C. J., concurred.

Rehearing denied.