text:
    [Crim. No. 4208.
    In Bank.
    July 12, 1939.]
    THE PEOPLE, Respondent, v. JOSEPH LARISCY et al., Appellants.

      Joe Orloff, Paul Pearlin, Richard Kittrelle and Carl W. Minton for Appellants.
    Earl Warren, Attorney-General, and Eugene M. Elson, Deputy Attorney-General, for Respondent.
   THE COURT.

Defendants have appealed from convictions of murder of the first degree, upon verdict with no recommendation, and of several counts of robbery of the first degree, and attempted robbery. Defendant Larisey admitted a prior conviction of felony, and defendant Woollomes admitted two such prior convictions. The jury found that each was armed at the time of the commission of the offenses charged herein. Sentence of death was pronounced against each defendant on the murder counts.

No attack is made on the conviction on the robbery counts. On the murder charges, the evidence is sufficient to sustain the verdicts of murder in the first degree. The record shows that on February 23, 1938, a little after midnight, defendant Larisey and another man came to the Burp Hollow Cafe on North Western Avenue in Los Angeles. After sitting there for awhile, they arose and Larisey drew a revolver and announced that it was a “stick up”. He forced one of the waiters to open the cash register, another waiter and a customer to lie on the floor, and robbed the register. His companion also threatened those present with his gun. In the course of this robbery, either he or his companion shot and killed the proprietor, Harold A. Thompson, who was behind the bar. Although no witness testified as to exactly what happened at that moment, the events leading up to it and immediately following it were fully covered in the testimony. H. A. Touby, Lester Beeler, and Royal Tipton, employees of the cafe, testified to the facts just related. Beeler was the waiter who was compelled to lie down on the floor. Tipton was the waiter forced to open the cash register. Mrs. Samuels, a customer, and Alva Epperson, an entertainer, also observed the affair and gave similar testimony.

The identification of Lariscy was positive. That of Woollomes was not quite as strong, but was sufficient. Touby thought Lariscy’s companion “resembled” Woollomes except that he seemed heavier. Evelyn Morehead, a waitress, whose testimony at the preliminary examination was read into the record, said that Woollomes looked “very familiar”. Mrs. Samuels also thought the man resembled Woollomes. Epperson thought Woollomes was the man who shot Thompson, and Tipton identified Woollomes positively, as one of the two men who robbed the place. He also testified that at the time of the shot he saw Woollomes in front of the bar with smoke coming out of the barrel of his gun.

It is unnecessary to discuss the robbery counts other than to state that the verdicts on these were likewise supported by sufficient testimony.

The alleged errors in the trial are few and may be briefly noticed. The first one is the refusal of the court to grant defendants’ motion to exclude witnesses from the courtroom during the testimony of other witnesses. No reason was offered for the motion save the suggestion that the evidence of one might influence the others. The court observed that they had testified in the preliminary examination; that their testimony had been transcribed; that there was more likelihood of influence outside in the hall than in the courtroom ; and denied the motion for lack of a sufficient showing of necessity. The matter being one within the sound discretion of the court, this was not error.

It is next asserted that the trial court misquoted testimony by stating that the witness Touby had testified that “the man with Lariscy resembled Mr. Woollomes very much, but he seemed heavier ’Touby’s actual testimony was: “He resembled him very much, with the exception that he was heavier than Mr. Woollomes ...” The court’s statement was obviously correct.

It is said that the court unjustly criticised counsel for defendant Woollomes. In this instance the record merely shows that an objection was sustained to a question, the court observing that he did not see its materiality, that it seemed “to be directed to a criticism of the officers”. There was no misconduct in this.

It is also contended that the court erred in refusing a proffered instruction that the defendants did not have to take the witness stand; but in view of the fact that defendants did in fact take the stand, the instruction would have been irrelevant and confusing. The court fully instructed the jury in the usual manner on the presumption of innocence and burden of proof.

Another instruction refused was to the effect that in the event both defendants were found guilty it was not necessary that each suffer the same penalty. The jury was, however, properly instructed that each defendant could be convicted or acquitted of any of the charges, and that it was entirely for the jury to determine the penalty.

There was, finally, a motion for new trial on the ground of newly discovered evidence, and a purported petition for leave to produce additional evidence. The affidavit of one Fred Seward was produced in support of the motion, and he testified at the hearing thereof. His testimony was simply contradictory of that of other witnesses at the trial, and the trial court found it unworthy of credence and denied the motion. We find nothing in this conclusion which could constitute an abuse of its discretion. Nor is there any warrant for the taking of additional evidence in this court.

The evidence being sufficient to sustain the verdicts, and no error appearing in the trial, the judgments of conviction must be, and they are hereby affirmed.

The order denying new trial is affirmed, and the petition for leave to produce additional evidence is denied.


source: Caselaw Access Project

author: THE COURT.

license: Public Domain

text:
    [Crim. No. 4200.
    In Bank.
    July 12, 1939.]
    In the Matter of the Application of DONALD A. ROTHROCK for Writs of Audita Querela and Coram Nobis, etc. In the Matter of the Application of DONALD A. ROTHROCK for a Writ of Habeas Corpus. THE PEOPLE, Appellant (Respondent) v. DONALD A. ROTHROCK, Respondent (Petitioner).
    [Crim. No. 4201.
    In Bank.
    July 12, 1939.]
    [Crim. No. 4046.
    In Bank.
    July 12, 1939.]

      Donald A. Rothrock, in pro. per., Josiah Coombs, Peggy Halloran and J. M. Frame for Petitioner.
    Earl Warren, Attorney-General, Frank Richards, Deputy Attorney-General, Buron Fitts, District Attorney, and Jere J. Sullivan, Deputy District Attorney, for Respondent.
   THE COURT.

By this consolidated proceeding, the applicant, Donald A. Rothrock, has moved and petitioned this court for writ of coram nobis, writ of audita querela, writ of habeas corpus, writ of certiorari, recall of remittitur, revocation and annulment of judgment, subpoena duces tecum, production of documents, permission to appear and testify, and other and further relief. Uncertain of his remedy, petitioner has couched his plea in these various forms, but the allegations in each instance are identical, and the prayer in substance is that, regardless of form, he be given the relief to which the facts entitle him.

The relief sought, and the full measure thereof, may be accorded petitioner on his motion to recall the remittitur. This is the form of remedy available for correction of the type of error of which he complains. No greater scope of relief can be procured by means of his various other motions and petitions, and they must therefore be denied. The proceeding, in the discussion which follows, will be treated as a motion to recall the remittitur.

The history of this cause is related in prior decisions. (People v. Rothrock, 8 Cal. (2d) 21 [63 Pac. (2d) 807]; Peo ple v. Rothrock, 21 Cal. App. (2d) 116 [68 Pac. (2d) 364].) On January 22, 1936, after a trial by the court on the merits, jury being waived, petitioner was found guilty on two counts charging attempted murder, and a third count charging assault with a deadly weapon. His counsel immediately interposed an oral motion for a new trial. On January 31st the date fixed for hearing that motion, petitioner in propria persona filed “Objections to Fatally Defective Verdict”, and there was also a substitution of attorneys. On February 1st petitioner’s new counsel filed a written notice of intention to move for a new trial, probably in ignorance of the fact that an oral motion had already been made. The objections and the motion, after continuances, were finally set for hearing on March 6th. On that day, at a session held hurriedly before giving way to another trial, counsel presented his argument upon the objections to the verdict and expressed his readiness to argue the motion for new trial. Time would not permit of the latter argument, and the question of continuance was discussed. The court stated that it was his purpose to grant the motion for new trial, if counsel would submit it. Counsel, however, objected to arguing it before hearing the court’s ruling on the objections to verdict, or to submitting it without argument. The court finally concluded the prolonged colloquy with the statement: “We will just obviate all that; the so-called objection to the verdict of the court is sustained; the proceedings at the trial are vacated, and the defendant is remanded to the Master Calendar Department for re-pleading.”

From this order an appeal was taken by the People, with the result that upon hearing by this court the order was “reversed and the cause remanded to the trial court with instructions to enter judgment in accordance with the finding of the court”. (People v. Rothrock, 8 Cal. (2d) 21 [63 Pac. (2d) 807].) The direction to enter judgment of conviction was predicated upon the mistaken belief, expressed in the opinion, that no motion for new trial had been made. Pursuant to the mandate of the remittitur embodying the erroneous direction, the trial court entered judgment, and petitioner appealed therefrom. On appeal the judgment was affirmed. People v. Rothrock, 21 Cal. App. (2d) 116 [68 Pac. (2d) 364].)

By the present proceeding no attack is made upon the decision of this court or the remittitur thereafter issued, in so far as reversal of the order sustaining objections to the verdict is concerned. The adjudication that that order was wrongful and erroneous is unassailable. But petitioner does challenge that portion of the decree and the remittitur which remanded the cause with instructions to the trial court to enter judgment of conviction. He contends that the cause should have been remanded for a new trial, and from the failure .to so direct a miscarriage of justice has resulted. He urged, when the cause was before this court, that because the trial court had not passed upon his motion for new trial within the time provided in section 1191 of the Penal Code, he had become of right entitled to a new trial under section 1202 of said code. He made the same argument at the hearing had on return of the remittitur to the trial court; he demanded and moved for new trial, for arrest of judgment, or for alternative relief. That court, however, announced that it considered the mandate of the remittitur of this court to be binding upon it, and that it was thereby precluded from taking any action other than to enter judgment as directed. After entry of the judgment and upon the appeal therefrom on the merits, petitioner again asserted his right to a new trial, but the District Court of Appeal refused to consider the point on the ground that it had theretofore been determined by this court (People v. Rothrock, 21 Cal. App. (2d) 116 [68 Pac. (2d) 364]). Petitioner next sought relief through an application for writ of habeas corpus (Crim. No. 4187), which was denied. Thereafter he instituted the present proceeding, wherein he has moved that this court recall and correct its remittitur. It is apparent that he has been vigilant in urging his claim.

The ground of the motion to recall the remittitur is that the judgment of this court was improvidently granted under a mistake of fact, a mistaken belief that no motion for new trial had ever been made, whereas the fact of the matter is, as above stated, that at the close of the trial, immediately after the court announced its finding of guilt, petitioner’s then counsel moved orally for a new trial. His request is reported at page 321 of the Reporter’s Transcript as follows: “If your Honor please, at this time I interpose a motion for a new trial upon all the statutory grounds and request that the time of passing judgment be deferred.”

That this court was unaware of the making of the motion at the time it rendered its decision (People v. Rothrock, 8 Cal. (2d) 21 [63 Pac. (2d) 807]), is shown by its discussion of petitioner’s contention that he was of right entitled to a new trial. The opinion states: 11 But this argument proceeds upon a false premise. There was in fact no motion made for a new trial, the notice of motion is not the motion itself and is not sufficient to require the court to pass upon it. . . . In this case the defendant not only made no motion but declined and refused to submit the motion. ...” Again, in setting forth the facts of the case, it is said: “However, on the day when the objections were to be heard and the motion for new trial made, the defendant refused to submit or make the motion for a new trial, but insisted that the court rule upon his objections to the verdict.”

The remarks quoted explain the manner in which this court was misled. The written notice of motion which was filed by new counsel, after interposition of the oral motion by former counsel, is the document referred to in the statement of the opinion that “the notice of motion is not the motion itself”. The change of counsel, the filing of the written notice without reference to the prior oral motion, and the later refusal to argue and submit the motion prior to ruling on the objections to the verdict all tended to confuse the record, and easily led the reader of the transcript to conclude that no motion had actually been made. But for the oversight, this court would undoubtedly have held that petitioner was entitled to a new trial, and would have remanded the cause therefor. There is no doubt that petitioner suffered prejudice by the error. The trial court considered that he had good ground for a new trial, and expressed his intention to grant the motion therefor when counsel submitted it. Had not the attempt been made to reach the same end by sustaining objections to the verdict, petitioner would probably have had his new trial.

A mistake of fact on the part of an appellate court which results in prejudicial error or a miscarriage of justice affords a proper ground for recall and correction of the remittitur. This is well settled. Exceptions to the general rule that an appellate court loses all control and jurisdiction over a cause after the remittitur has been issued by its order and filed in the court below, were declared in this state in 1864, in the case of Rowland v. Kreyenhagen, 24 Cal. 52. It was there said: “ . . . This general rule rests upon the supposition that all the proceedings have been regular, and that no fraud or imposition has been practiced upon the court or the opposite party; for if it appears that such has been the case, the appellate court will assert its jurisdiction and recall the case. Against an orqler or judgment improvidently granted, upon a false suggestion, or under a mistake as to the facts of the case, this court will afford relief after the adjournment of the term; and will, if necessary, recall a remittitur and stay proceedings in the court below. This is not done, however, upon the principle of resumption of jurisdiction, but upon the ground that the jurisdiction of the court cannot be divested by an irregular or improvident order. In contemplation of law, an order obtained upon a false suggestion is not the order of the court, and may be treated as a nullity. If, under color of such an order, the proceedings have in part found their way back to the court below, yet in law they are considered as still pending in the appellate court, and that court may take such steps as may be necessary to make the fact and law agree. ’ ’ This doctrine is quoted with approval in Trumpler v. Trumpler, 123 Cal. 248 [55 Pac. 1008], and Isenberg v. Sherman, 214 Cal. 722 [7 Pac. (2d) 1006.]

In a note in 23 California Law Review, at page 354, which digests numerous authorities on the subject, the following conclusion is expressed: “It would appear from these cases that a remittitur will be recalled when, but only when, inadvertence, mistake of fact, or an incomplete knowledge of all the circumstances of the case on the part of the court or its officers, whether induced by fraud or otherwise, has resulted in an unjust decision.”

In State v. Ramirez, 34 Idaho 623 [203 Pac. 279, 29 A. L. R. 297], a criminal case wherein the defendant had been convicted of murder and his punishment had been fixed by the jury at death, the Supreme Court of the State of Idaho had under consideration the question of its power to recall a remittitur. The ground urged in support of the motion to recall was “that counsel failed to fully brief and argue the question of the power of this court to modify the judgment by reducing the penalty to life imprisonment, and that this court was led into error by reason of a suggestion that it was without such power”. After reviewing authorities from many jurisdictions, and quoting the doctrine of Rowland v. Kreyenhagen, supra, as being in conformity with the preponderance of judicial authority, the court concluded that a proper case for the exercise of its power to recall and correct its mandate was presented, saying: “This court, upon respondent’s suggestion, assumed, although it did not decide, that it had no power to reduce the penalty fixed by the jury. We do not mean to be understood as inferring that fraud or imposition was practiced upon this court by either of the parties connected with the cause, but if the court fell into error it was by reason of the fact that counsel failed to properly brief and present the question now under consideration. The questions involved here are of the utmost importance to appellant, and every consideration of justice demands that this court determine its power both to recall the remittitur and to reduce the punishment in this case, and that the punishment be reduced if the facts do not warrant the imposition of the death penalty. While the circumstances of this case do not require the adoption of so broad a rule as is followed in New York or Oklahoma, yet there is ample authority to justify us in holding that this court retains jurisdiction of an appeal, during the term at which a judgment is rendered, where such judgment was inadvertently given in consequence of a false suggestion. ...” (See, also, Municipal Bond Co. v. City of Riverside, 138 Cal. App. 267 [32 Pac. (2d) 661]; Haydel v. Morton, 28 Cal. App. (2d) 383 [82 Pac. (2d) 623] ; 2 Cal. Jur., p. 1068, see. 634; note 84 A. L. R. 579, 591 et seq.; 3 Am. Jur., p. 754, par. 1264; 5 Cor. Jur. Secundum, p. 1561, sec. 1996.)

From the foregoing discussion it follows that if, at the time the cause was before this court on appeal from the order sustaining objections to the verdict, petitioner was correct in his contention that he was entitled to a new trial, the remittitur should now be recalled and corrected to accord him this right.

Upon that appeal it was urged by the People that a defendant may not move for a new trial in a felony case tried by the court wdthout a jury. We cannot subscribe to the view that a waiver by a defendant of his right to a trial by jury constitutes a waiver of his right to move for a new trial. Where a jury is waived, the finding of the court is substituted for the jury verdict, but this substitution does not affect the applicability of the code provisions prescribing the procedure for new trial. So, in the present case, the motion for new trial was duly made; the court did not pass thereon within the time provided by section 1191 of the Penal Code; petitioner, having been prejudiced by the failure to have the motion determined, is now entitled to a new trial under section 1202 of said code.

All motions and petitions presented in this proceeding, other than the motion to recall the remittitur, are denied. The motion to recall the remittitur is granted. The remittitur heretofore issued on January 18,1937, is recalled. There is stricken therefrom the order that the cause be “remanded to the trial court with instructions to enter judgment in accordance with the finding of the court”, and for the words so stricken the following are substituted: “remanded to the trial court for a new trial”.


text:
    [S. F. No. 16129.
    In Bank.
    July 18, 1939.]
    CLARICE McC. COLLINS, Appellant, v. BRIDGE INVESTMENT CO. (a Corporation) et al., Respondents.

      Alfred J. Hennessy for Appellant.
    Elliot W. Seymour and D. C. Murphy for Respondents.
   THE COURT.

Appellant moves for an order vacating a sale of real property made pending appeal in alleged violation of a stay order granted by this court.

On August 31, 1938, the Superior Court in and for the City and County of San Francisco made its order terminating a moratorium decree theretofore entered and directing that sales under certain trust deeds “proceed as provided by law”. The defendant in the action, as owner of the property, thereupon noticed an appeal to this court from said order. Shortly thereafter, and to preclude a sale of the property pending appeal, the appellant filed with this court a petition for a writ of supersedeas. Upon consideration of the petition, this court on -September 26, 1938, issued its order directing the respondents to show cause on October 4th why a supersedeas should not issue as prayed. The order to show cause thus issued by the court made no provision for a stay. However, two days after the issuance of such order and on September 28, 1938, counsel for the appellant presented for filing, after having received permission therefor, a form of order to show cause which contained a provision for a stay in the following language: “And in the meantime and until further order of the Supreme Court, it is also ordered that all proceedings for the sale of the property described in said petition and upon the said orders appealed from, be and the same are hereby stayed.” This latter order was served on the court below and the respondents. Contrary to the appellant’s contention, this order, assuming it to be properly in the case, did not furnish a continuous stay pending approval of a stay bond, hereinafter to be discussed, so as to assertedly preclude and make illegal any sale of the property pending the appeal. The stay so relied on by appellant was but temporary in character and expressly made operative only “until further order of the Supreme Court”. This court made its further order in the matter when on October 13, 1938 (amending an earlier order of October 7th) it directed issuance of a writ of supersedeas “upon the appellant giving a bond in the sum of three thousand dollars ($3000) within ten days of the date hereof. The sureties, form and conditions of said bond to be approved by the Presiding Judge of the Superior Court of the City and County of San Francisco, or by some other Superior Court Judge designated by special order by said Presiding Judge, upon five (5) days written notice to the counsel for each of the defendants in said action.”

The bond so required to be furnished never has been filed by the appellant. Approximately ten months have expired and the transcript upon the appeal likewise has not been filed. The ten-day period prescribed for the giving of the bond upon which the supersedeas was conditioned, expired on October 23, 1938, and the respondents proceeded to and did sell the property on November 2, 1938. At that time no bond had been furnished or filed. It is this sale that the appellant now seeks by this motion to vacate and set aside on the ground that it was in violation of a stay granted by this court.

The foregoing chronological statement of the facts definitely indicates that there was no stay in existence at the time of such sale. The supersedeas ordered issued on October 13th was conditioned upon appellant’s furnishing an approved bond within ten days. As stated, said bond was not so furnished nor has it ever been filed down to the present time. As a result, the supersedeas has not issued. The fact that appellant sought a rehearing (which was denied) of the order requiring the stay bond and that subsequent to the sale, which was made in default of the furnishing of the bond, appellant sought and procured two extensions of time for the furnishing of such bond and that the superior court on November 29, 1938, prescribed the terms of such bond, is immaterial. The sale already had been made for default in furnishing the bond and the subsequent extensions of time therefor and the fixation of the terms thereof were undoubtedly granted and ordered without knowledge of the fact that the sale had been made because of appellant’s earlier default in the premises. They were idle acts. The issue was moot. Moreover, appellant’s last attempt to secure a further extension of time was refused on December 5, 1938, and, as indicated, no attempt has been made to file the bond though more than six months have since expired.

We conclude, therefore, that there was no stay in existence at the time of the sale on November 2, 1938, and that the motion to vacate the sale must be, and it is, denied.

Rehearing denied.


author: SHENK, J.

text:
    [S. F. No. 16204.
    In Bank.
    July 20, 1939.]
    H. E. MANNING, Appellant, v. CONSTANCE MAY GAVIN, Respondent.

      Philip R. MeEnerney for Appellant.
    Leslie L. Heap, Jr., and J. Thaddeus Cline for Respondent.
   SHENK, J.

This is a motion to dismiss an appeal from a judgment for the defendants in an action to recover attorney fees.

The record shows that a notice of the order denying the plaintiff's motion for a new trial was served on the plaintiff’s attorneys, Samuel J. Jones and Philip MeEnerney, on August 2, 1937; that the clerk in the office of attorney MeEnerney inadvertently entered the date of service as August 30, 1937. Notice of appeal was filed on August 30, 1937. On September 7, 1937, Mr. MeEnerney applied to the trial court for an order extending time within which to file a proposed bill of exceptions. The court made its order granting an extension to October 5, 1,937. It is to be noted that the order was applied for and granted after the expiration of the ten-day period prescribed by section 650 of the Code of Civil Procedure for the filing of a proposed draft ‘ of the bill. Thereafter, on September 20, 1937, the defendant and respondent, Constance May Gavin, moved to set aside the order granting additional time as beyond the jurisdiction of the court; also to terminate the proceedings on appeal. On September 27, 1937, the trial court properly granted the motion to set aside the order extending time. (Lewith v. Rehmke, 217 Cal. 563 [20 Pac. (2d) 687] ; sec. 1054, Code Civ. Proc.) On October 2, 1937, the trial court denied the motion to terminate the proceedings for preparation of the record on appeal. At the same time it granted the plaintiff’s motion theretofore made for relief from his default in failing to file a proposed bill of exceptions within the time prescribed by said section 650. The plaintiff filed his proposed bill of exceptions on October 5th following, and subsequently the bill of exceptions was settled and filed.

The present motion to dismiss the appeal from the judgment is made on the grounds that on September 7, 1937, the court had no jurisdiction to extend the plaintiff’s time within which to file a proposed bill of exceptions; and that the court abused its discretion in relieving the plaintiff from his default.

There is no necessity to discuss the first ground, inasmuch as the trial court vacated its order extending time and there is no such order subsisting and subject to review in this proceeding. The question is whether the trial court abused its discretion in relieving the plaintiff from his default.

The intendments are in favor of the trial court’s order. The court must have believed that attorney MeEnerney had charge of conducting the preparation of the record on appeal and that the delay in filing a proposed bill of exceptions was due to inadvertence of his clerk in entering an erroneous date of service of notice of the order denying the motion for a new trial. The time limit prescribed by said section 650 is not mandatory, but is directory only. (McWilliams v. Hudson, 98 Cal. App. 185, 187 [276 Pac. 598, 277 Pac. 529].) The trial court has power, pursuant to section 473 of the Code of Civil Procedure, upon a showing of excusable neglect or mistake, to relieve a party from his default in failing to file a transcript or proposed bill within time. (Banta v. Siller, 121 Cal. 414 [53 Pac. 935] ; Haviland v. Southern California Edison Co., 172 Cal. 601 [158 Pac. 328]; Landreth v. Ducommun, 8 Cal. (2d) 694 [68 Pac. (2d) 231].) It has been held that the inadvertent entry of an erroneous date in the journal of proceedings kept by the defaulting party’s attorney would justify an order relieving the party from the default resulting therefrom. (Haviland v. Southern California Edison Co., supra.) We perceive no good reason to disturb the order of the trial court relieving the plaintiff from his default. It does not appear that the court abused its discretion in granting such relief.

The policy of the law generally favors the hearing of appeals on the merits. (Lewith v. Rehmke, supra; Wood v. Peterson Farms Co., 214 Cal. 94 [3 Pac. (2d) 922] ; Haviland v. Southern California Edison Co., supra; Banta v. Siller, supra.) In Banta v. Siller, supra, at page 416, it was said: “Indeed, it has been frequently said here that in eases of doubt the court ought to resolve the doubt in favor of the application, so that the full merits of the litigation might be presented,” citing cases.

The motion to dismiss the appeal is denied.

Edmonds, J., Houser, J., and Curtis, J., concurred.


text:
    [L. A. No. 16709.
    In Bank.
    July 20, 1939.]
    HERBERT M. GODDARD, Respondent, v. SECURITY TITLE INSURANCE AND GUARANTEE COMPANY (a Corporation) et al., Appellants.

      Mitchell, Silberberg, Roth & Knupp and Guy Knupp for Appellant.
    O’Melveny, Tuller & Myers and Louis W. Myers, as Am/iei Curiae, on Behalf of Appellant.
    H. A. Savage for Respondent.
   THE COURT.

Upon rehearing, we hereby adopt the former opinion of this court, prepared by Mr. Justice Lang-don, with certain changes hereinafter appearing. The said opinion reads as follows:

“This is an action against stockholders of Metropolitan Trust Company, a corporation, to recover on their proportional liability for the debts of the corporation. The obligation arose in 1930, before the repeal of our statutory provision governing this liability. The cause of action arose out of the alleged violation by the corporation of instructions concerning the use of trust money paid to it by plaintiff.
“In 1930, Earle C. Dingwell, nephew of plaintiff, owned real estate and personal property in southern California, considered to be worth about $1,600,000. The properties were encumbered with a number of mortgages, trust deeds and other liens, and these obligations of Dingwell, together with the claims of unsecured creditors, amounted to about $1,000,000. The creditors were pressing for payment, and loss of the properties was imminent, when Dingwell evolved a plan to place them in trust with Metropolitan Trust Company, to hold and administer them and to pay claims. As part of the plan, Dingwell and another party interested were each to provide $50,000 in cash. Dingwell approached plaintiff, his uncle, who resided in Philadelphia, to borrow the money, and plaintiff requested that the proposal be submitted to his legal adviser. The trust plan was accordingly presented, followed later by the completed trust indenture, setting forth certain specific terms and conditions regarding releases by creditors, clearing of most of the encumbrances except first deeds of trust, etc. This was signed and forwarded to the trust company in California on September 12, 1930. On September 24, 1930, plaintiff transferred to the company the sum of $49,280, ear-marked ‘Dingwell-Goddard Trust’. In response to requested instructions as to use of the funds, plaintiff wired the company on October 17, 1930: ‘Deliver to Earle C. Dingwell funds on deposit to my credit if all conditions of trust are satisfactorily arranged.’ The money was thereafter expended by the trust company, but a number of the trust conditions were never performed. The trustee failed to obtain title to the personal property, permitted unauthorized encumbrances, failed to secure required releases, and in various other ways did not carry out the terms of the agreement. Ultimately the scheme failed in its object, foreclosure suits were instituted, and the properties were lost. Plaintiff was unable to recover the money lent and the security therefor having been wiped out, he brougli: suit.
“Two actions were commenced. The first, filed in October, 1932, in the federal District Court, was against the Metropolitan Trust Company. The complaint was framed on a theory of conversion. To plaintiff’s second amended complaint, filed in March, 1933, the defendant demurred, generally and specially, on a number of grounds. The demurrer was sustained with right to apply for leave to amend. But later, when an amended complaint was tendered, the court refused to permit its filing, and on June 1, 1934; judgment was entered, in which it was ordered that the action be ‘dismissed with prejudice'. Appeal was taken and the Circuit Court of Appeals, with one judge dissenting, upheld the judgment, mainly on the theory that an action for conversion would not lie under the facts alleged, and that the remedy, if any, was an action on the case, the recovery being limited to the damages proximately resulting from the alleged violation of instructions. (See Goodard v. Metropolitan Trust Co., 82 Fed. [2d] 902.) The dissenting judge considered the proposed amended complaint sufficient, and expressed himself forcefully and at length to that effect. (See 82 Fed. [2d] 913.)
“On October 21, 1933, while this action against the corporation was pending in the Federal court, plaintiff filed the present suit against defendants, stockholders of the corporation, in the superior court of Los Angeles, alleging substantially the same cause of action with corrected pleadings. A demurrer was overruled, and the case was set to be tried November 2, 1936. In June the Circuit Court of Appeals handed down its decision, and thereupon defendants amended their answer to plead the defense of res judicata as a complete bar to the action. The case was tried, certain amendments were allowed to conform to proof, and the matter submitted. On May 26, 1937, the trial court gave judgment in favor of plaintiff against defendants in the total amount of $69,842.13. Defendants appealed.
“On the merits of plaintiff's claim that the corporation violated instructions concerning the use of his money, thereby causing the loss, we see no ground for disturbing the conclusion of the court below. The evidence was voluminous, and subject, as is usual in such cases, to different inferences, but those drawn by the trial court and expressed in its comprehensive findings are supported by sufficient evidence, and it is unnecessary to review the record at length. Nor do we find any substantial merit in the defense of the statute of limitations. In our opinion the trial court correctly placed the creation of the liability at the time the trust agreement was signed by the trustee, October 23, 1930. The action was filed on October 21, 1933, within the three-year period prescribed by section 359 of the Code of Civil Procedure. Defendants’ plea is based upon the contention that the liability arose on September 24, 1930, when the money was first delivered to the corporation. But the action was for damages for violation of the terms of the agreement, and no liability of this type could arise prior to the signing of the agreement. It follows that the action was brought in time.
“The major defense, and the only one which requires extended discussion, is that the judgment in the prior action in the federal court is res jv,dicata and therefore a complete bar to the present action. To determine this point it may be desirable first to review some of the principles governing the effect of judgments of dismissal and judgments entered after the sustaining of demurrers without leave to amend.
“First, a final judgment, rendered upon the merits by a court having jurisdiction of the cause, is conclusive of the rights of the parties and those in privity with them, and is a complete bar to a new suit between them on the same cause of action. This is the general doctrine of res judicata. (See 2 Freeman on Judgments, [5th ed.], sec. 627, p. 1321 et seq.; von Moschzisker, Res Judicata, 38 Yale L. J. 299; Price v. Sixth Dist. Agricultural Assn., 201 Cal. 502 [258 Pac. 387].) Second, a judgment not rendered on the merits does not operate as a bar. (Campanella v. Campanella, 204 Cal. 515 [269 Pac. 433]; 2 Freeman on Judgments, [5th ed.], sec. 723, p. 1530; 34 C. J. 774, sec. 1193.) Third, a judgment based upon the sustaining of a special demurrer for technical or formal defects is clearly not on the merits and is not a bar to the filing of a new action. (2 Freeman on Judgments, [5th ed.], see. 745, p. 1569; 34 C. J. 797, sec. 1219.) Fourth, judgments based upon sustaining a general demurrer have given rise to an apparent conflict of decision, and careful distinctions must be drawn between the cases. (See von Moschzisker, Res Judicata, 38 Yale L. J. 299, 318 et seq.; Clark, Code Pleading, p. 367.) A judgment given after the sustaining of a general demurrer on a ground of substance, for example, that an absolute defense is disclosed by the allegations of the complaint, may be deemed a judgment on the merits, and conclusive in a subsequent suit; and the same is true where the demurrer sets up the failure of the facts alleged to establish a cause of action, and the same facts are pleaded in the second action. (2 Freeman on Judgments, [5th ed.] sec. 746, p. 1571; Erganian v. Brightman, 13 Cal. App. (2d) 696 [57 Pac. (2d) 971]; von Moschzisker, Res Judicata, 38 Yale L. J. 299, 318, and cases cited. ) But even a judgment on general demurrer may not be on the merits, for the defects set up may be technical or formal, and the plaintiff may in such ease by a different pleading eliminate them or correct the omissions and allege facts constituting a good cause of action, in proper form. Where such a new and sufficient complaint is filed, the prior judgment on demurrer will not be a bar. (Newhall v. Hatch, 134 Cal. 269 [66 Pac. 266, 55 L. R. A. 673] ; Terry v. Hammonds, 47 Cal. 32; Dyment v. Board of Medical Examiners, 93 Cal. App. 65 [268 Pac. 1073]; 2 Freeman on Judgments, [5th ed.], secs. 747, 748; von Moschzisker, Res Judicata, 38 Yale L. J. 299, 318.) This result has frequently been reached where the failure of the first complaint was in misconceiving the remedy, or framing the complaint on the wrong form of action. (2 Freeman on Judgments, [5th ed.], secs. 734, 735; von Moschzisker, Res Judicata, 38 Yale L. J. 299, 318.) Fifth, an ordinary judgment of dismissal, for example, for want of prosecution, has the same effect as a nonsuit, that is, is considered-not on the merits and not a bar to another suit on the same cause of action, unless the record shows that there was an actual determination on the merits. (Everts v. Blaschko, 17 Cal. App. (2d) 188 [61 Pac. (2d) 776] ; Matteson v. Klump, 100 Cal. App. 64 [279 Pac. 669]; Campanella v. Campanella, 204 Cal. 515 [269 Pac. 433] ; 2 Freeman on Judgments, [5th ed.], sec. 753, p. 1582.)
“Applying these principles to the case before us, it is apparent that the prior judgment of dismissal by the federal district court was entered primarily on two grounds, first, that the complaint was framed on a theory of conversion rather than an action on the case; and second, that it was uncertain and insufficient in its pleading of causal connection between the violation of instructions by the trustee and the resulting loss to the plaintiff. This is the necessary conclusion from a reading of the minute order of the court, as well as from a study of the opinion of the Circuit Court of Appeals, hereinabove mentioned. The actual order was merely that ‘said demurrer is sustained’, without expressly stating whether the grounds of special or of general demurrer were controlling. But assuming that the court was also sustaining the general demurrer, the minute order shows that it was not on a matter of substance which could not be remedied by another pleading. The court’s determination amounted to nothing more than that the plaintiff had failed, in the two respects mentioned above, to establish a right of recovery against the defendant by that particular complaint. The judgment was based upon formal matters of pleading, and concluded nothing save that the complaint, in the form in which it was then presented, did not entitle plaintiff to go to trial on the merits. Such a judgment is clearly not on the merits, and under the rules set forth above, is not res judicata.
“Defendants, however, rely heavily on the argument that the federal court intended its judgment to be a bar, as indicated by the form of the order, which states that the action was ‘ dismissed with prejudice ’. The contention is that the court was determined to end the litigation, that it was deciding the cause on the merits, and expressly made its decision a bar to another action by the addition of the words ‘ with prejudice ’.
“This view is in our opinion based upon a misconception of both the power of the court and the ordinary meaning and effect of a dismissal ‘with prejudice’. In the first place, if the intention of the court, gathered from its order or other source, were the test of the effect of the judgment on subsequent actions, the doctrine of res judicata would disappear as a legal principle, and the bar of a judgment would depend wholly upon the whim of the first judge, or, more probably, on the form of proposed order drafted by successful counsel. Suppose, for example, a complaint were filed, stating a good cause of action and sufficient in every respect except that some minor allegation appeared uncertain or ambiguous. Suppose further that a special demurrer were filed on this ground alone, and the court sustained the demurrer without leave to amend, and ordered the action dismissed. The plaintiff could appeal and doubtless have the judgment reversed. But he would not be limited to that remedy. He would be free to file a new action -within the period of the statute of limitations, and a plea of res judicata, that is of prior adjudication on the merits, would completely fail. Now, what difference would there be if the court in such a situation were to add the words ‘with prejudice’ to its order of dismissal? Such a statement, if it has any definite meaning, suggests merely that the court believed that the judgment would finally conclude the controversy. But it is the nature of the action and the character of the judgment that determines whether it is res judicata. The intention of the court to make a determination on the merits may be important, but if the judgment is clearly not on the merits, the court’s intention to make it a bar is immaterial. The words ‘with prejudice ’ add nothing to the effect of the judgment in such a case, no matter what light they throw on the intention of the court.
“We think this is the principle underlying the case of Matteson v. Klump, 100 Cal. App. 64 [279 Pac. 669], where the court said: ‘As announced by decisions of the Supreme Court of this state, the ordinary rule is that the dismissal of an action does not operate as a bar to another action for the same cause of action as was stated in the action which was dismissed . . . but specifically, where the dismissal of an action does not purport to go to the merits of the ease, the trial court has no authority to include within the judgment of dismissal an order which in effect precludes the plaintiff from instituting another action in which the merits of the controversy may be litigated. ’ The court then, in affirming the judgment struck out the words ‘with prejudice’. A similar result was reached in Steffens v. Rowley, 10 Cal. App. (2d) 628 [52 Pac. (2d) 493], (See, also, Lindblom v. Mayar, 81 Wash. 350 [142 Pac. 695] ; Lower v. Forelich, 151 Minn. 552 [185 N. W. 940].) If the trial court has no authority to add the term ‘with prejudice’ to a judgment not on the merits, it necessarily follows that the unauthorized addition of this term cannot so radically change the effect of the judgment as to make it a bar even though it is not on the merits.
“In the instant case we have, therefore, a judgment of dismissal based upon a demurrer sustained for defects of form, under circumstances where it was possible to plead a good cause of action in another suit. This type of judgment, under the rules we have discussed, is not res judicata.
“The authorities which purport to hold that judgments of dismissal ‘with prejudice’ are res judicata are nearly all distinguishable upon careful examination. One type of case is based upon that situation where by statute or practice this kind of judgment is used after a determination on the merits, and it is a bar, not because of the use of the words ‘with prejudice’, but because the judgment was in fact on the merits and that form was used to describe it. (See 2 Freeman on Judgments, [5th ed.], sec. 752, p. 1581.) Other cases are concerned with dismissals by consent or stipulation of the parties, after compromise or settlement of the suit, where the dismissal is intended to operate as a retraxit and end the litigation. In such cases the judgment of dismissal is entered ‘with prejudice’ and is of course a bar to a subsequent suit. (See Pulley v. Chicago etc. Ry. Co., 122 Kan. 269 [251 Pac. 1100] ; Morgan v. Hart, 84 Wash. 496 [147 Pac. 26] ; Hargis v. Robinson, 70 Kan. 589 [79 Pac. 119] ; cf. Lamb v. Herndon, 97 Cal. App. 193, 202 [275 Pac. 203] ; Breznikar v. T. J. Topper Co., 23 Cal. App. (2d) 298, 303 [72 Pac. (2d) 895].)”

The view we take on the point just discussed makes it inappropriate to decide whether the doctrine of res judicata is rendered inapplicable by reason of difference in parties to the two actions. In the prior action the plaintiff sued the corporation; here he sues the stockholders. It was an established rule in California that the peculiar type of stockholders’ liability formerly in force in this state, upon which this action is founded, made stockholders directly and primarily liable for the obligations of the corporation. (See Ellsworth v. Bradford, 186 Cal. 316 [199 Pac. 335] ; Paladini, Inc., v. Superior Court, 218 Cal. 114 [21 Pac. (2d) 941] ; 9 Cal. L. Rev. 495; 2 So. Cal. L. Rev. 370.) Opposed to the conclusion reached in these cases is the decision in Triano v. F. E. Booth & Co., 120 Cal. App. 345 [8 Pac. (2d) 174], in which it was held that an exception to the rule exists where the prior action is terminated by judgment in favor of the corporation. The theory of the decision was that the liability of the stockholders depended upon the culpability of the corporation, and that if the corporation was exonerated the stockholders could not be liable. However, since we have already held that the judgment is not res judicata because not on the merits, no further consideration of this other point is indulged.

The judgment is affirmed.

Rehearing denied.


text:
    [Sac. No. 5219.
    In Bank.
    July 21, 1939.]
    ALEX E. WILSON, Appellant, v. CHEROKEE DRIFT MINING COMPANY (a Corporation) et al., Respondents.

      Sterling Carr for Appellant.
    J. F. Good for Respondents.
   THE COURT.

This is an action to cancel an assessment on shares of stock and enjoin the sale of stock for the enforcement thereof.

Defendant is a California corporation, with a capital stock of 500,000 shares of $1 par value. In 1935, plaintiff recovered a judgment against certain shareholders and acquired their stock in satisfaction thereof, new certificates being then issued to him in the amount of 46,666 shares. At that time the stock was nonassessable.

In May, 1,937, the articles were amended to permit the levy of assessments by the board of directors. At that time the corporation owed current accounts of over $3,000, and was liable to its president, Alexander Logie, on promissory notes given for cash advances in the sum of $13,312.32. Logie held 276,712 shares.

On July 9, 1937, the board levied an assessment of five cents per share on the outstanding stock. At the same time it adopted a resolution authorizing acceptance of any part of the promissory notes held by Logie as payment of his assessment. When enforcement of the assessment was attempted, plaintiff protested, and thereafter brought this action to annul it. It is conceded that Logie, the president, controlled the board of directors, but no fraud or. breach of trust was charged, and the validity of the debts was not questioned. The lower court gave judgment for defendant corporation and plaintiff appealed.

The first and principal contention of plaintiff is that the assessment in this ease involves a denial of due process of law, and an impairment of the obligation of contract. The right of the corporation to amend its articles to provide for the power of assessment is o£ course conceded, and it is likewise conceded that one who becomes a stockholder makes his contract in anticipation of any possible changes in the law under the state’s reserved power (see, generally, Ballantine & Sterling, California Corporation Laws, 1938 ed., p. 5; Heller Inv. Co. v. Southern T. & T. Co., 17 Cal. App. (2d) 202 [61 Pac. (2d) 807]); but it is asserted that to assess the stockholder for debts existing prior to the amendment of the articles is an unconstitutional application of the law.

Plaintiff relies upon Rainey v. Michel, 6 Cal. (2d) 259 [57 Pac. (2d) 932, 105 A. L. R. 148], a case wholly distinguishable, for there the attempt was made to apply a new law imposing a special stockholders’ liability to creditors for debts incurred prior to the law’s enactment. This court pointed out that at the time the debts were contracted the creditors had no such right against the stockholders, and declared that to impose this liability retroactively would be a denial of due process. This case, dealing with liability to creditors, has no relevancy where, as here, we are concerned with the interrelations of the corporation and its stockholders. (See Schroeter v. Bartlett Syndicate Building Corp., 8 Cal. (2d) 12 [63 Pac. (2d) 824]; Heller Inv. Co. v. Southern T. & T. Co., supra.)

When plaintiff became a stockholder he.knew that under the law then in existence the power of assessment could be conferred on the corporation by amendment of the articles, and that this power could be exercised to raise funds for the corporation, for the purpose of paying any debts of the corporation owed at the time the assessment was levied, regardless of when they were incurred. No violation of his constitutional rights was involved in the making of that assessment.

The other contention of plaintiff is that the assessment was void because of a failure on the part of the corporation to comply with the terms of section 326, subdivision 8, of the Civil Code. This section provides that certain restrictions, liens or powers, including the power of assessment, shall not be effective “against a transferee” of shares unless they are stated on the face of the certificate. The provision was intended to protect a transferee who purchases in reliance on the face of the certificate from undisclosed liens, powers or restrictions which vitally affect his shares. (See Ballantine & Sterling, California Corporation Laws, 1938 ed., pp. 132, 133.) Obviously, it does not apply to every shareholder, but is limited to transferees, that is, those who take the stock by transfer of the certificate from an existing shareholder after the restriction or power is in effect. Persons to whom stock is issued by the corporation cannot correctly be deemed “transferees". Plaintiff was at one time a transferee of his stock, but following the transfer new certificates were issued to him by the corporation, and thereafter the amendment was adopted and the assessment made. At the time of the amendment giving the power of assessment he was a stockholder with full knowledge of all the proceedings. The provision was therefore entirely inapplicable to him.

The judgment is affirmed.


author: THOMPSON, J., pro tem.

text:
    [Sac. No. 5084.
    In Bank.
    July 21, 1939.]
    M. D. BAKER, Appellant, v. N. M. GIBSON et al., Respondents.

      Carter, Barrett, Finley & Carlton and Oliver J. Carter for Appellant.
    Chenoweth & Leininger for Respondents.
   THOMPSON, J., pro tem.

The plaintiff brought suit to terminate a lease and to recover possession of a placer mining claim and equipment in Shasta County. The first count sought to recover the right of possession of the property. The second cause of action was for two instalments of rent alleged to be due, amounting to $850. The answer conceded the termination of the lease and disclaimed the desire to retain possession of the property by the defendants. It denied that instalments of rent were due or owing to plaintiff. In a counterclaim the defendants asked for judgment for $266.88 necessarily expended by the defendants in repairing the machinery to render it suitable for the purpose for which it was leased.

The court adopted findings favorable to the defendants, determining the plaintiff wrongfully and unlawfully terminated the lease March 13, 1935, and that no instalments of rent were then due or owing to him. But title to the leased property was quieted in plaintiff by consent expressed in the pleadings. Judgment was rendered accordingly. From that judgment the plaintiff has appealed.

The cause involves chiefly a construction of the terms of the written lease which was executed January 2, 1935, material portions of which read as follows:

“This lease is made for the purpose of making an operating test on the Ringius and Heynen property hereinabove mentioned and described, for a period of thirty (30) operating days for the sum of Thirty-five ($35.00) Dollars per day as rent, and it is hereby agreed that an operating day shall consist of a minimum of four (4) hours working with the shovel, and a maximum of one (1) day shall be considered twenty-four (24) hours working with the shovel aforesaid.
“And it is hereby further agreed that the commencement of the said thirty (30) days shall not be later than seven (7) days after the shovel above mentioned is returned to the property by the said lessor herein. The said shovel now being off the property for the purpose of widening a ditch of the Happy Valley Water Company.
“The said lessees hereby agree to pay the said sum of Thirty-five ($35.00) Dollars per day as rent in three installments as follows:
“The sum of Two Hundred ($200.00) Dollars shall be paid upon the execution and delivery of this assignment of lease and option; the sum of Two Hundred ($200.00) Dollars shall be paid when the operating test begins which shall not be later than seven (7) days after the shovel is returned to the above mentioned property, as hereinabove mentioned, the remaining Six Hundred Fifty ($650.00) Dollars shall be paid within ten (10) days after the operating test begins.
“It is hereby further agreed by and between said lessor and said lessees that all improvements, repairs, together with work, labor, supplies, water rents, royalties and all other operating expenses during the term of this test shall be at the expense of the said lessees.
The said lessees are hereby excused from the performance of any term, condition, covenant, or payment, when the performance of the same is prevented by the acts of God, strikes, war, insurrections, or the elements beyond the control of man.
“In the event the said lessees . . . shall at any time be in default in making any of the payments herein specified to be made, then this assignment of lease and option shall terminate, . . . provided that before such forfeiture . . . the said lessor shall notify the said lessees, or their assigns, in writing, that they are in default and specify in what particulars.”

The object of the lease was to enable the defendants to prospect for minerals. The most important part of the equipment was a power shovel, without which the dredging project could not be performed. The lease was executed “for a period of thirty (30) operating days”, to begin seven days after the shovel was delivered at the claim. It was then being used on other property. The lease did not contemplate a continuous use of the machinery. It specifically provides that the lessee is relieved of its terms by conditions “beyond the control of man”. The consideration for the lease was $35 for each operating day. The lease provides that “an operating day shall consist of a minimum of four (4) hours working with the shovel, and a maximum of one (1) day shall be considered twenty-four (24) hours working with the shovel”. Payments of the total sum of $1,050 became due in three instalments as follows: $200 upon the execution of the lease, which was paid; $200 “when the operating test begins”, and the remaining $650 “within ten days after the operating test begins.”

The shovel was not delivered until February 17th. It was then out of repair and unfit for use, as the plaintiff well knew. The center gudgeon sleeve, shaft and bushings were broken. Although the plaintiff’s attention was called to that fact, he failed to repair the machine and left for Oregon before it was delivered. The defendants did not know where to address him during his absence. They were therefore unable to notify him of the cost of such necessary repairs as provided by section 1957 of the Civil Code. They, however, promptly ordered the required parts to be shipped to them at a cost of $216.88, and had them installed at a further reasonable charge of $50. The court found that the defendants necessarily incurred an expense of $266.88 in repairing the shovel so as to enable them to use it for dredging purposes. That finding is supported by the evidence.

The evidence is uncontradicted that the first day the defendants were able to use the machine was February 25th. They then had further trouble with the machinery which required tuning, adjusting and aligning. They were unable to continue operations until March 3d. On that day the pinion of the chain-drive to the screen broke and they were compelled to remove it and take it to town for repairs. Before they could resume operations a heavy storm occurred and the Happy Valley ditch, upon which they relied for water to wash tailings, broke, entirely shutting off their supply and preventing them from operating again until March 11th. They then continued dredging for four days, when they were notified by the plaintiff that their lease was terminated for failure to pay the second instalment of rent. The machinery was actually operated only five days during the time they were permitted to use it. There is no evidence they secured any returns from their enterprise.

February 26th, the day after the first ineffectual effort to operate the shovel, the plaintiff visited the property and demanded payment of the second instalment of $200. He was then told of the necessary expense of $266.88 incurred by the defendants to place the shovel in workable condition. The receipted bill of $216.88 was then offered to him in full settlement of the second instalment, which was refused. March 13th, the plaintiff served the defendants with written notice of default of the payment of the second instalment only, and of his intention to terminate the lease on that account. No further work was performed on the premises after March 14th. The defendants abandoned the enterprise on account of the notice terminating the lease. This suit was then commenced.

The court found that the shovel was delivered to the defendants in a defective condition and unfit to perform the services for which it was intended, as the plaintiff knew; that the plaintiff was out of the State of California and the defendants were unable to notify him of the cost of repairing the shovel, but that they expended in necessarily repairing the machine to place it in workable condition, the sum of $266.88, which the plaintiff refused to pay; that the first day upon which the defendants were able to operate the machine was February 25th; that on account of defective and broken machinery and the bursting, due to unusual storms, of the Happy Valley ditch, upon which source they relied for water to operate their washing machine, they were unable to resume operations, with the exception of an ineffectual effort to do so on March 3d; that plaintiff wrongfully and unlawfully terminated the lease by serving notice on the defendants March 13th; that the payment of $266.88 for repairing the shovel more than offset the second instalment of $200, which was not due until seven days after February 25th when the shovel was in workable condition, and that defendants were not in default of any instalment of rent. Judgment was rendered in favor of the defendants for the sum of $266.88 upon their counterclaim.

The trial court correctly determined that the defendants were entitled to credit for the sum of $266.88 which they necessarily expended in repairing the shovel to render it suitable for the service for which it was rented. The lease should be construed in the light of sections 1955-1957 of the Civil Code, which provide that a lessor of personal property is required to “put it into a condition fit for the purpose for which he lets it”, and to deliver it to the lessee suitable for operation; that the lessee shall bear all expenses “during its ttse by him”; and that if the lessor fails to deliver the property in a suitable condition for use, the lessee “may expend any reasonable amount necessary to make good the latter’s default ”. The last-cited section provides that notice of such necessary expense must be imparted to the lessor only when it “can conveniently be given”.

In the present case the plaintiff was previously notified of the defect in the machine and failed to repair it. He left the State of California the day before it was delivered. The defendants did not have his address and were therefore unable to notify him of the cost of the necessary repairs. It became necessary to make the repairs to place the shovel in condition to be used for the purpose for which it was leased. The defendants were authorized under such circumstances to expend a reasonable amount in repairing the machine. It is not contended the sum expended is excessive.

We are of the opinion the trial court correctly construed the lease to be “for a period of thirty operating days”, as distinguished from calendar days. The contract defines an “operating day” as not less than four, nor more than twenty-four hours “working with the shovel”. The lease specifies that the lessees shall pay for each “operating day” the sum of $35 as rental for the property, aggregating $1,050. That rental was to be paid in the following instalments, to wit, $200 upon the execution of the contract, which was paid; $200 “when the operating test begins which shall not be later than seven (7) days after the shovel is returned to the above mentioned property”. This last-quoted provision should be construed to mean the second instalment was due not later than seven days after the shovel was delivered to the lessees in proper condition to be used for the purpose for which it was rented. It was ready for use February 25th. It may be said the operating test began on that day. At least the court so found. Since the second instalment was due seven days after the machine was delivered ready for use, it became due March 3d. But the defendants were not then in default for failure to pay plaintiff that sum because they had previously expended for his benefit in repairing his shovel the sum of $266.88. They offered him the receipted bill for $216.88 in payment of that second instalment, which he refused. They were therefore not in default, and the court correctly so found, but failed to credit the plaintiff upon the defendants’ counterclaim with the amount of that second instalment.

The court correctly found that the $650 instalment was not due, for the reason that the time for its payment was extended under the terms of the contract by an occurrence “beyond the control of man” which prevented them from operating the prospecting enterprise. The contract specifically provides that “said lessees are hereby excused from the performance of any term, ... or payment, when the performance of the same is prevented by the acts of God, . . . or the elements beyond the control of man”. Mr. Ma-gee testified that:

“On March 3rd we operated again . . . until we broke the pinion that drove the chain drive to the screen of our washing machine. . . . Then we had to stop, took off that pinion, brought it to town, had a new one cast, and took it back. In the meanwhile the Happy Valley ditch was broken during that heavy rain, right near a box up there, when all the water to Igo was cut off. . . . There wasn’t any water to work with. . . . Q. When was the next operating made? A. . . . March 11th.”

Clearly the defendants had no control over the storm which broke the ditch upon which they were dependent for their supply of water to operate their washing machine. That calamity over which they had no control had the effect, under the express provisions of the contract, to extend the time for paying the third instalment of $650. It was not due when the plaintiff served notice of the termination of the lease. Assuming that the ten-day period for paying that last instalment began to run the day after the operations commenced on February 25th, only six days elapsed before the ditch broke and the water failed. The defendants were not again able to resume operations until March 11th, after which date they were entitled to four days more in which to pay that last instalment, which would expire March 14th. In the meantime notice of the termination of the lease was served on March 13th. The $650 payment was not then due. On account of that notice the defendants ceased working on the following day and abandoned the enterprise. They did not oppose the plaintiff taking immediate possession of the mine and equipment.

Moreover, the plaintiff wrongfully terminated the lease for the alleged default of payment of the second instalment of $200, for the reason that they had previously expended in his behalf more than that sum in repairing his shovel to place it in workable condition. They were not then in default, as we have previously stated. The plaintiff’s notice of alleged default contained only the specification of failure to pay that second instalment. The contract requires the notice to contain the “specific particulars” in which it is claimed the contract has been breached. That notice did not specify the failure to pay the last $650 instalment as ground for termination of the lease. Evidently the plaintiff did not then consider the defendants in default in that regard.

The lease contemplated that the defendants would be permitted to prospect the claim for mineral for a period of thirty operating days with the shovel at $35 per working day, aggregating the sum of $1,050. They actually operated only five days without any proved profit. To permit the plaintiff to terminate the lease under such circumstances and recover the final instalment of rent after giving notice of the termination of the lease before the payment was due, would result in unjust enrichment on his part in spite of his own wrong. Such a construction of the contract is not reasonable.

The plaintiff is entitled to credit on the defendants’ counterclaim for the amount of the second instalment of $200, which the court failed to allow him. That credit leaves the defendants entitled to judgment for $66.88 and costs taxed at $13.75. The judgment is modified accordingly.

As so modified, the judgment is affirmed, neither party to recover costs on appeal.

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

Rehearing denied.


text:
    [S. F. No. 16169.
    In Bank.
    July 22, 1939.]
    LEWIS F. BYINGTON et al., Petitioners, v. THE SUPERIOR COURT OF STANISLAUS COUNTY et al., Respondents.

      John J. O’Toole, City Attorney, Dion B. Holm, Assistant City Attorney, and A. E. Chandler for Petitioners.
    Sloss, Turner & Finney, Murray Bourne and M. C. Sloss for Respondents.
   THE COURT.

The petitioners Byington, Filmer, Me Galium, McLaughlin and Murphy, as members of and constituting the Public Utilities Commission of the city and county of San Francisco, and the petitioner Cahill, as the manager of utilities of said city and county, seek by this proceeding to review and annul an order of the respondent superior court adjudging them guilty of contempt and directing that each pay a fine of $100 or in lieu thereof to serve one day in jail for each $5 of the fine remaining unpaid. The alleged contempt consisted of the violation of an injunction entered by the respondent court, the execution of which, petitioners claim, had been stayed by an appeal.

The action in which the injunction had issued was commenced on May 31, 1932, by Meridian, Ltd., a corporation, against the city and county of San Francisco and four other defendants. It was in the nature of an action to quiet title to water rights and for injunctive relief to protect those rights. As between the plaintiff and the city the action involved the rights of the city as an appropriator of water of the Tuolumne Biver in connection with its Hetch Hetchy project, and the rights of the plaintiff as a riparian owner and appropriator of water down stream from the works of the city. At the conclusion of a protracted trial the respondent superior court on June 18, 1936, decreed to the defendant city, as superior to the plaintiff’s riparian right, a prescriptive right to store 235,465 acre-feet of water per seasonal year and enjoined it from storing water in excess of such amount, which amount represented the then capacity of the city’s two reservoirs. Both parties appealed.

It appears that during the progress of the trial, the city had started work on increasing the height of its Hetch Hetchy dam to provide holdover storage in that reservoir for its Moccasin power plant. The work was completed in April, 1938, subsequent to the entry of judgment and while the cause was on appeal. The capacity of the dam was thereby increased from 206,000 to 340,830 acre-feet. The enlarged reservoir was filled during the period May 12 to 30, 1938, pending the appeal. "Upon the filing of an affidavit by plaintiff’s counsel, the trial court cited the petitioners to show cause, if any they had, why they should not be adjudged in contempt for storing in the enlarged reservoir a quantity of water in excess of that awarded to the city under its decree. Contrary to the contention of the petitioners herein, the respondent court upon the hearing concluded that the injunction issued by it was wholly prohibitory, and not mandatory, in character and was not therefore stayed by the appeal so as to warrant a storage of water greater than that therein allotted to the city.

It is well settled that a prohibitory injunction is not stayed by an appeal therefrom while an injunction mandatory in character is automatically stayed by appeal. (Joerger v. Mt. Shasta Power Corp., 214 Cal. 630, 637 [7 Pac. (2d) 706]; Ohaver v. Fenech, 206 Cal. 118 [273 Pac. 555]; Baar v. Smith, 201 Cal. 87 [255 Pac. 827].) Whether an injunction is prohibitory or mandatory in character is not always easy of determination. What may appear to be negative or prohibitory frequently upon scrutiny proves to be affirmative and mandatory. The authorities indicate that an injunctive decree that compels the surrender of the lawful possession of real property amounts to the granting of affirmative relief and is mandatory in character. (Clute v. Superior Court, 155 Cal. 15, 18-20 [99 Pac. 362, 132 Am. St. Rep. 54]; Joerger v. Mt. Shasta Power Corp., 214 Cal. 630, 637, 638 [7 Pac. (2d) 706].) The Clute case, supra, declares that such a decree, though couched in terms of prohibition, is mandatory in effect, and a proceeding by the court issuing it to punish a violation as a contempt is in the nature of process for the enforcement of the affirmative feature and is not permissible pending appeal. In that case an injunction issued “restraining the defendant Ulute from collecting any moneys of the corporation or disbursing the same except on the written order of the president and secretary, also restraining him from representing himself as manager and treasurer of the corporation and ‘from interfering with, or directing, or attempting to direct or control the employees of said corporation’ ’’. Clute prosecuted an appeal from the decree, pending which, and in violation of the terms of the decree, he prevented an employee of the corporation from entering the office. He was adjudged in contempt. Upon a review of the contempt proceeding, this court, while recognizing that the injunction was couched in terms of prohibition, nevertheless held it to be affirmative or mandatory in character. It is there declared: “If Clute was in the actual possession of the hotel and the personal property in it, an order punishing him for preventing another person from entering and taking charge of the books, keys, and other property could have no other purpose or effect than to compel him to turn over his possession to such other, or at least to surrender his theretofore exclusive possession. . . . The status of the parties, at the time the injunction was issued, was this: Clute, claiming to hold on behalf of the corporation, was resisting a right of entry claimed by persons who, as he asserted, had no authority from the corporation to take possession. An order turning over the control of the property from him to the other claimants would certainly, if executed, operate to change that status. The injunction ivas, therefore, mandatory in effect, and this regardless of the fact that, in law, the corporation rather than Clute, may be said to have been in possession. It is, therefore, unimportant that the court inserted in its order of commitment a finding that Clute was not in possession of the hotel or its contents. For the purpose of determining the effect of this injunction as mandatory or prohibitory, we must consider the result of an enforcement of the writ of the position of the defendant, as asserted in the court below. If the injunction compels him affirmatively to surrender a position which he holds, and which, upon the facts alleged by him, he is entitled to hold, it is mandatory. ’ ’

Analogous reasoning was employed in the comparatively recent Joerger case, supra, wherein a temporary injunction had issued restraining the defendants “from continuing to divert any of the waters of Hat creek from the natural channel of said stream, where the same passes through, over, along, by, upon and past” the plaintiff’s riparian land. Pending an appeal from such seemingly prohibitory injunctive decree, the defendants sought a supersedeas to stay its operation. The application was denied without prejudice upon the ground that the injunction was mandatory in character and stayed as a matter of law pending the appeal. In so concluding, this court stated:

“After further consideration of the question we are persuaded that the injunctive order issued herein has the essential characteristics of a mandatory injunction. The defendants are and always have been lawfully in possession of their property. In that possession they are engaged in a lawful use thereof. They are not trespassing upon any of the rights of the plaintiff. They are not maintaining a nuisance. They are entitled in any event to their proportional share of the water by reason of the fact that their rights and the rights of the plaintiff are correlative, coordinate and in common as to said opposite riparian lands. These rights may be exercised by either party subject to the equitable power of the court to apportion the use of the water as between them. The effect of the order, if enforced, would be to disturb a lawful use of property lawfully in possession, and to dispossess the defendants of the use of any of the waters of the stream. It would thus compel the surrender of the lawful possession of real property and would amount to affirmative relief as contemplated by the decisions. (United Railroads v. Superior Court, 172 Cal. 80 [155 Pac. 463]; Ohaver v. Fenech, supra.)”

In our opinion, the foregoing authorities are decisive of the present proceeding. The reasoning therein compels the conclusion that the injunction involved herein was mandatory in character and stayed by the appeal therefrom. Throughout the trial of the main action, and up to the present moment, the city has contended that in addition to the prescriptive right recognized in and awarded to it under the decree of the respondent court, it was the owner and possessor of certain appropriative rights in and to the waters of the Tuolumne River. The effect of the injunctive decree was to compel the city to restrict its storage solely to the amount of water to which it was entitled under its prescriptive right and to subordinate certain of the city’s appropriative claims to that of the plaintiff in the action and, in effect to deprive the city of the full possession and privilege of exercising such appropriative rights. That the appropriative rights consistently asserted by the city were improperly denied to it by the decree of the respondent court, is attested by the fact that this court recently had occasion upon appeal to modify the decree of the respondent court in a manner which recognized and upheld, subject to the plaintiff’s riparian right, the city’s appropriative rights to an extent warranting diversion and storage by the city to the full capacity of the enlarged reservoir. (Meridian, Ltd., v. San Francisco, 13 Cal. (2d) 424 [90 Pac. (2d) 537].) We are of the view, therefore, that in so far as the injunctive decree of the respondent court undertook to and did preclude the exercise by the city of its appropriative rights in and to the excess waters of the Tuolumne River it was affirmative or mandatory in character, within the meaning of the authorities, and was therefore automatically stayed by the appeal therefrom and the action of the city and petitioners, pending the appeal, in diverting and storing excess waters to the capacity of the enlarged reservoir was not contemptuous and the order characterizing and punishing it as such was in excess of the respondent court’s power and jurisdiction and must be annulled.

In conclusion, it is well to point out that at the time of the storage which gave rise to this proceeding there was flowing by the lands of the plaintiff corporation in the principal action an amount of water much in excess of its entitlement under the respondent court’s decree. In other words, at no time has the city or its agents diverted or stored water in such manner or quantity as to interfere with the taking by the plaintiff riparian owner of its decreed quantity ,of water.

The order adjudicating petitioners in contempt and imposing punishment therefor is annulled.


author: EDMONDS, J.

text:
    [L. A. No. 16302.
    In Bank.
    July 24, 1939.]
    CHARLES C. L. LESLIE et al., Plaintiffs; CATHERINE L. LESLIE, Appellant, v. FEDERAL FINANCE COMPANY, INC. (a Corporation), Respondent.

      Olson & Ahlport, Olson & Olson and Robert Clifton for Appellant.
    Forgy, Reinhaus & Forgy and A. M. Bradley for Respondent.
   EDMONDS, J.

Appellant, Catherine L. Leslie who, with her husband, Charles C. L. Leslie brought this action to impose a trust upon property owned of record by respondent, challenges the correctness of the trial court’s action in entering a final decree quieting respondent’s title to it. The principal question presented for decision concerns the power of the superior court to extend the time for the performance of an interlocutory decree entered by consent of the parties.

In 1932, Catherine and Charles Leslie executed a deed of trust upon a walnut and citrus fruit ranch owned by them to secure, among other obligations, a note for $45,870 payable to the respondent. Subsequently, Mr. Leslie’s interest in the property was acquired by a judgment creditor through proceedings under execution. Later in 1932, upon default in the performance of the trustors’ obligations, the property was sold by the trustee under the power of sale reserved in the deed of trust. At this sale, upon a bid of $56,000, the respondent became the purchaser. Immediately following this sale, the Leslies transferred to the respondent farm implements and ranch equipment of an alleged value of $10,000.

In 1935, appellant and her husband brought the present suit in equity alleging that the respondent is a trustee of the real and personal property for their use and benefit. The purpose of the action is to compel a reconveyance of the property, secure an accounting of the income derived from its use, and, in the meantime, prohibit the respondent from transferring the property.

The complaint alleges that over a period of more than a year preceding the trustee’s sale, in numerous conversations, J. A. George, active manager, vice-president, secretary and director of the respondent corporation, agreed with Mr. and Mrs. Leslie as follows: For the purpose of clearing title to the real property so that respondent’s loan could be refinanced and plaintiffs’ equity protected, the finance company would cause the property to be sold under the power of sale contained in the trust deed and would purchase it at the trustee’s sale. The Leslies were then to apply to the Federal Land Bank of Berkeley, California, for a substantial loan which would be secured by a first mortgage on the property. The amount obtained by this loan would be paid to and accepted by the respondent in reduction of their indebtedness to it. They were to remain in possession of and operate the ranch, the net proceeds of operation to be paid to the respondent and applied toward the payment of their indebtedness.

Other allegations are that after the trustee’s sale further conversations were had in which it was agreed that Mr. and Mrs. Leslie would transfer to the respondent all farm implements and equipment used in the operation and maintenance of the ranch, which personal property was to be returned to them when the indebtedness secured by the trust deed should be refinanced. It is also alleged that a tentative commitment from the Federal Land Bank of Berkeley for a loan of $32,500 on the property was rejected by the respondent corporation ; that since respondent had obtained title to the property under the trustee’s deed, it had received net profits from the property in excess of $44,000, which it had refused to apply in reduction of the indebtedness; and that the aggregate of this profit and the loan agreed to by the Federal Land Bank is more than enough to discharge all amounts owing to the respondent.

Respondent joined issue denying the allegations of the complaint respecting the oral agreement and the case went to trial in June, 1936. Following the introduction of the evidence presented on behalf of Mr. and Mrs. Leslie, the finance company moved for a nonsuit, which motion was denied. Thereupon the parties stipulated for the entry of an interlocutory decree.

In substance, this decree gave Mr. and Mrs. Leslie the right to purchase the ranch, including the farm tools and equipment, “at any time on or before the 10th day of December, 1936”, for approximately $58,000 plus interest at 8 per cent, costs of litigation including respondent’s attorney’s fees and costs of maintaining and operating the ranch less deduction of net income from operations. Any dispute concerning the purchase price was required to be determined by the court on motion. The finance company was given the right to remain in possession to manage and operate the property until Mr. and Mrs. Leslie should exercise their right to buy, and upon payment of the purchase price, respondent was required to “execute to the plaintiffs, or their nominee, a grant deed to the real property hereinbefore referred to, free and clear of all liens and encumbrances made, done, or suffered by the defendant as of the date of purchase by the defendant of said real property at foreclosure sale of deed of trust but without covenant or warranty expressed or implied, the defendant being only required to convey to the plaintiffs the title to the real property which it acquired as purchaser under foreclosure of said deed of trust”. The decree also required Mr. and Mrs. Leslie to pay the purchase price to the Orange County Title Company in Santa Ana, which was to pay it over to the respondent upon receiving the instruments of title to the property, after which they would be entitled to a final decree confirming their title to the real and personal property. However, the decree also provided that if “said moneys shall not have been received by said Orange County Title Company for the unconditional use of the defendant as provided in this decree on or before” the 10th day of December, 1936, “then the Court shall enter its final decree quieting title in the said defendant”; and “if said plaintiffs shall fail to make such payments as herein provided to be made by the plaintiffs to the defendant for the purchase of said property, then immediately after the time limited by this interlocutory decree, to wit, the 11th day of December, 1936, the defendant shall be entitled to a final decree quieting title to said real and personal property in said defendant. ...”

Shortly after the entry of this decree Charles C. L. Leslie assigned to his wife all of his rights thereunder, and on December 18, 1936, the required payment not having been made, respondent moved the court for entry of a final decree quieting title in it. By affidavit and testimony presented on that day and at a subsequent hearing held December 21st, the following facts were shown:

On December 7th counsel for respondent advised appellant that the total purchase price for the property, as computed by the respondent, in accordance with the terms of the interlocutory decree, would be $55,259.28 as of December 10th. Appellant had then interested one J. Roy Smith in buying the property, and late in the afternoon of December 10th Smith deposited $56,000 with the Orange County Title Company, for the account of the respondent, under escrow instructions which required the issuance of a policy of title insurance to Smith and his wife as a condition precedent to payment of the required amount to the respondent. Smith also entered into a written contract of purchase with appellant by which he agreed to buy the property for $68,000. This amount was to be paid by the $56,000 then on deposit and $12,000 to be deposited with the title company within 30 days.

During the morning of December 11th, counsel for the respondent telephoned to the title company and inquired whether there was any money on deposit with that company which it would pay to the respondent upon delivery by it of the instruments of title required by the interlocutory decree. It was informed that the money was on deposit but could not be paid out at that time. Later the same day respondent made a tender of the required deeds and assignments to the title company, and the latter refused payment upon the ground that the escrow instructions called for the issuance of a certificate of title to Smith which would require a title search and also required an additional deposit of $12,000 to be made by him. When a title search was completed on December 18th, the escrow holder stated that to clear the title a quitclaim deed and a dismissal of certain litigation would have to be obtained. There was some question also concerning the necessity for a release by respondent of a crop mortgage on the property.

However, in the course of the hearing, counsel for appellant stated that Smith had agreed to change the escrow instructions to permit an immediate and unconditional release from the escrow of the amount required to pay the respondent’s demand in full. Mr. Smith later took the witness stand and confirmed this offer. The respondent, however, refused to complete the transaction.

Upon these facts the court found that since appellant had not complied strictly with the terms of the interlocutory decree, it had no power to compel appellant to accept the tender after the expiration of the time limited in the interlocutory decree. The motion was thereupon granted and a final decree quieting respondent’s title to the property was later entered.

The appellant urges that the trial court interpreted its equity powers too strictly, and in the absence of a showing that respondent was prejudiced by the short delay, the court had the right, which it should have exercised, to compel respondent to accept the money tendered to it and complete the transaction, thus relieving appellant against a forfeiture. This contention must be sustained. It is provided in section 3369 of the Civil Code that “neither specific nor preventive relief can be granted to enforce a penalty or a forfeiture in any case”. Section 3275 of the same code provides: “Whenever, by the terms of an obligation, a party thereto incurs a forfeiture, or a loss in the nature of a forfeiture, by reason of his failure to comply with its provisions, he may be relieved therefrom, upon making full compensation to the other party, except in a ease of grossly negligent, willful, or fraudulent breach of duty.” These sections have been applied in numerous eases.

Thus, in Hopkins v. Woodward, 216 Cal. 619 [15 Pac. (2d) 499], the plaintiff licensed the defendant to produce and stage a play. Due to the illness of an actor the defendant was unable to commence performances on the date specified in the contract and plaintiff brought suit to terminate the license for breach of its provisions. The defendant showed that he was ready to produce the play a week after the time agreed and offered to compensate plaintiff for the delay. The court held that since the injury caused by the delay was compensable and the plaintiff had not been negligent, section 3275 of the Civil Code would not permit a forfeiture of the plaintiff’s license, even though the contract expressly provided that his rights should terminate upon a breach of its provisions.

The same equitable doctrine was applied in Ebbert v. Mercantile Trust Co., 213 Cal. 496 [2 Pac. (2d) 776], There the vendee of real property gave notes secured by deeds of trust on the property as payment on the purchase price. These notes contained a provision that they should become “null and void as to the balance of payments” in the event the vendor failed to perform a contract to care for the property. The vendee brought suit to cancel the notes and deeds of trust upon the ground that the vendor had not performed his contract. It was held that since there was nothing to show that the plaintiff could not be compensated in damages for the vendor’s default, the provisions of the Civil Code which have been referred to prevented a forfeiture. Said the court: “Moreover, the action is in equity, to cancel the note and deed of trust. The settled doctrine not only prevents a court of equity from enforcing a forfeiture (Cal. Civ. Code, sec. 3369), but requires that the court grant relief from it.”

The recent case of Henck v. Lake Hemet Water Co., 9 Cal. (2d) 136 [69 Pac. (2d) 849], illustrates the same principle. There the plaintiff was entitled to receive specified quantities of water from defendant’s distributing system under a contract requiring the plaintiff to pay $50 on January 1st of each year. The contract also provided: “The payment of said sums at the time stated is a condition precedent to the right of the party of the second part to receive or use any water hereunder, and the failure to make such payment shall give the party of the first part the right without notice to terminate this contract. ’ ’ In a prior suit between the parties the plaintiff had been adjudged “entitled to have water delivered upon said land by the defendant ... so long as the plaintiff shall henceforth comply with the requirements and conditions of said contract”. For two years defendant had sent plaintiff advance notices of payments to become due, but in December, 1933, the usual notice was not sent and the plaintiff failed to make his payment on January 1, 1934. Eight days later defendant sent him a notice that his rights under the contract had been terminated. On January 11th plaintiff made a tender of $50 together with interest from January 1st, which was refused. In the action brought by the property owner for reinstatement of the contract, the defendant contended that time was of the essence of the contract, hence the plaintiff’s rights had been forfeited. But the court held that time was not an essential element of the contract and that, even if it were, a court of equity had power to relieve against the forfeiture under the facts shown.

In the present case the finance company insists that the consent decree is nothing more than an option to purchase which was not exercised by the appellant within the time limited and that it terminated upon the expiration of that time. It is true that time is of the essence of the ordinary option contract and no forfeiture results from a strict enforcement of its terms, because an option is merely an offer to sell and vests no estate in the property to be sold. (Wightman v. Hall, 62 Cal. App. 632 [217 Pac. 580]; Williston on Contracts, vol. 3, Rev. Ed. p. 2389, sec. 853.) However, the agreement of the parties embodied in the interlocutory decree is not, strictly speaking, an option. It is more in the nature of a contract of redemption. Appellant and her husband had formerly owned the legal title to the property, and from the facts alleged in their complaint, which presumably were proved prior to the entry of the consent decree, the plaintiffs retained an equitable interest in the property under the respondent’s agreement to permit them to refinance the trust deed indebtedness. The interlocutory decree confirmed this interest by providing a period within which the pla.irit.ifFs might redeem their property. Hence a decree quieting title in the respondent necessarily caused a forfeiture of the appellant’s equity which, as the record indicates, was worth at least $12,000.

Under the authorities cited, the superior court had the right to relieve against the forfeiture of this sum. Moreover, under section 3275 of the Civil Code the court would have been justified in making an order denying the motion for entry of a final decree. Relief to persons in situations substantially similar to that of the appellant has been permitted where the equities were far less favorable to the party in default. In Los Angeles Auto Tractor Co. v. Superior Court, 94 Cal. App. 433 [271 Pac. 363], an interlocutory decree ordered the plaintiff’s title to be quieted unless within 30 days after entry of judgment the defendant should pay $15,500 plus interest and certain other sums due under a contract for the sale of real property by plaintiff to the defendant’s assignor. No payment was made within the time limited and plaintiff moved for final judgment. The motion was denied on a showing that defendant would be able to comply within a short time. Thereafter the court granted numerous extensions of time and permitted continuances which resulted in a delay of almost a year. The plaintiff finally sought a writ of mandamus to compel the trial court to enter a final decree in his favor. It was held that the court had power to enlarge the time of payment called for in the interlocutory decree and had not abused its discretion in the orders made. Concerning the equity power to supervise decrees, the court said:

11 The power of a chancery court to supervise the execution of its orders, and even to modify them in ways affecting only the details of their performance, has long been recognized. ‘ There are some cases of decrees which, although they are final in their nature, require the confirmation of a further order of the court before they can be acted upon. In cases of decrees of foreclosure, the court will, upon application, enlarge the time for payment of the money, even though the final order has been enrolled.’ (Daniell’s Chancery Practice, 6th Am. Ed., pp. 991-993.) We find nothing in our statute or decisions which can be said to have been intended to limit the power of the Superior Court in a suit in equity to grant relief properly adjusted to the equitable rights of the parties as determined by the court, and to control the parties in all matters connected with their required obedience to the orders embodied in the decree.”

It is true that the ease last cited did not involve a consent decree and that it has been generally held in other jurisdictions that a court of equity has no power to modify or vary the terms of decrees entered by the stipulation of the parties. But conceding the validity of this distinction in its general application to such decrees, upon principle there is no reason to deny the court’s power to extend the time for performance which exists with respect to a simple contract merely because it is embodied in a consent decree of the court.

The appellant attempted in good faith to comply with the provisions of the decree. She offered full performance eight days after the time required. Indeed, the finance company at that time refused to accept the payment of all principal, interest and charges claimed by it but insisted upon retaining the debtor’s property notwithstanding the clear showing that Mrs. Leslie’s default was not the result of gross negligence, or of a wilful or fraudulent breach of duty. There is no evidence that the respondent suffered any substantial prejudice as a result of the delay or that full compensation could not have been made for the delay. Under these circumstances it was the duty of the court to grant appellant the relief she sought.

The judgment is reversed.

Shenk, J., Houser, J., and Curtis, J., concurred.

Rehearing denied.