author: HOUSER, J.

text:
    [S. F. No. 15881.
    In Bank.
    May 2, 1938.]
    NATIONAL ICE AND COLD STORAGE COMPANY OF CALIFORNIA (a Corporation), Appellant, v. PACIFIC FRUIT EXPRESS COMPANY, Respondent.

      Gavin McNab, Schmulowitz, Wyman, Aikins & Brune, Nat Schmulowitz, H. M. Hammack, Schauer, Ryon & McMahon, Leo T. McMahon, Robert E. Paradise, Gibson, Dunn & Crutcher, H. F. Prince, Homer D. Crotty and David P. Evans for Appellant.
    Henley C. Booth, H. H. McElroy, Hengstler, Dorr & Stevenson and Guy V. Shoup for Respondent.
   HOUSER, J.

On July 31, 1933, a statute known as the “Retail Sales Tax Act of 1933” (Stats. 1933, p. 2599) became effective. As far as here is important, the title of that statute is "An Act imposing a tax for the privilege of selling tangible personal property and for the privilege of furnishing, preparing or serving tangible personal property, providing for permits to retailers, (and) providing for the levying, assessing, collecting, paying and disposing of such tax, ...” In part, section 3 of the statute provides that, “For the privilege of selling tangible personal property at retail a tax is hereby imposed upon retailers. ...” Various other excerpts from the statute which contain implications of the fact that the tax' was intended to be levied upon retailers, are as follows: by section 9, it is provided that “The tax levied hereunder shall be a direct obligation of the retailer; . . . The retailer shall . . . make out a return . . . The retailer shall deliver the return together with a remittance of the amount of the tax due to the office of the board. ” By section 12, retailers are required to obtain permits to engage in the business of selling tangible personal property at retail. By section 13, a permit fee of $1 for each place of business of the retailer is required. By section 17, the board of equalization is authorized to make additional assessments of tax against a retailer. Section 18 authorizes the board of equalization to malee arbitrary assessments of tax against a retailer. By section 20, a retailer is authorized to obtain a hearing for reassessment of taxes assessed against him. By section 23, refunds to retailers are authorized. Section 24 has reference to fraud or evasion of the tax on the part of a retailer. Section 26 provides for the collection of the tax from retailers; and the tax is declared a lien against his property. Section 27 requires retailers to keep records. Section 31 allows a retailer who has paid a tax under protest to bring an action for the recovery of such tax, and by section 32, penalties are provided for against retailers who may violate an order of the board of equalization.

In opposition to that which may be termed the manifest intent of the foregoing provisions, the statute also contains certain other provisions, to wit: by section 4 thereof, it is provided that, “In any case where tangible personal property is sold at retail under a contract made prior to the effective date of this act, which specifies and fixes the sale price and such sale is taxable under this act, the seller may add the tax imposed by this act to the sale price and collect it from the buyer.” Section 8y2 of the statute contains the declaration that “The tax hereby imposed shall be collected by the retailer from the consumer in so far as the same can be done ...” By section 8 of the statute, a retailer is inhibited from advertising in any manner that the tax will be assumed or absorbed by him,41 or that it will not be added to the selling price of the property sold, or if added that it or any part thereof will be refunded ...”

At a date approximately seven years preceding that upon which said act became effective, a written contract was entered into between the plaintiff and the defendant, which related to the furnishing and the sale of ice by the plaintiff to the defendant for the purpose of the refrigeration of railroad ears which purportedly were owned by the defendant. Subsequently, that agreement was extended in its operative effect until April 30, 1938. At no time did the agreement contain any provision relative to the payment by either party of any sales tax such as was contemplated by the provisions of the “Retail Sales Tax Act of 1933”, or otherwise. Between the dates of August 1, 1933, and June 30, 1935, the plaintiff sold to the defendant many thousand tons of ice, which ice was used by the defendant both in interstate and in intrastate business, and for which full payment was made in accordance with the price fixed therefor by the terms of the agreement between the parties thereto. Based upon language that is contained within section 4 of the said act, to the effect that in circumstances such as hereinbefore have been outlined, the “seller” was authorized “to add the tax imposed by this act to the sale price and collect it from the buyer”, the plaintiff claimed that the defendant was liable for the payment of an additional sum of money, equal to the amount of the tax which had accrued on the gross amount of the purchase price of the said ice which theretofore had been delivered by the plaintiff to the defendant. In reliance upon other provisions of the act which hereinbefore have been set forth, the defendant refused to pay to the plaintiff the amount of its said demand with reference to said tax, or any part thereof. Acting within its assumed authority in the matter, the state board of equalization, having made its demand on the plaintiff that it pay to the said board the amount of the tax' that thus had become due, the plaintiff filed an action for declaratory relief against the defendant and the said board, to the end that the rights and the duties of the respective parties in the premises might be judicially determined. A general demurrer that was filed by said board to the complaint in said proceeding was sustained “without leave to amend” said complaint. From a judgment that subsequently was rendered in favor of the defendant Pacific Fruit Express Company, the plaintiff has appealed to this court.

Appellant urges the point that the defendant was a wholesaler of the ice that the plaintiff had delivered to it,—consequently, that the statute, having no reference to merchants of that description, had no application to the situation here presented.

Although in the course of the execution of the contract that existed between the parties thereto, the gross tonnage of ice that was thus sold and delivered might seem to indicate the conclusion that in effect a wholesale, rather than a retail business was transacted, nevertheless, in view of the language that is contained in subdivision (c) of section 2 of the statute, wherein a “retail sale” or “sale at retail” is expressly declared to mean “a sale to a consumer or to any person for any purpose other than for resale”, it becomes apparent that the question of the character of the business that was conducted by the ice company became one of fact. The finding that was made by the trial court on that issue was as follows :

“The relationship between the plaintiff ice company and the defendant express company in the sales and furnishings of ice by the former to the latter out of which this controversy arose was that said ice company was the retailer of said ice within the meaning of the act referred to in Paragraph V of the complaint, and not a wholesaler of said ice; and said express company was, within the meaning of said act, the consumer of said ice, and not a retailer or wholesaler thereof.”

The evidence with respect to that finding of fact is voluminous. However, including other evidence in support of the conclusion that was reached by the trial court in that connection, it may be noted that as a foundational fact, the express company was owned by the railroad companies to which ice was furnished; consequently that in the various transactions that occurred between either of the railroad companies and the express company, the latter was acting only as an agent for the former; also that in legal contemplation, as declared by numerous authorities, the ice was not purchased for the purpose of “resale”, but to the contrary, was “consumed” by the railroad company in performing its service to shippers in furnishing and refrigerating cars. No useful purpose would be served by presenting herein even a summary of the pertinent evidence in that regard. Suffice it to say that it is amply sufficient to sustain the conclusion that was reached by the trial court with reference thereto. In such circumstances, the rule is well established that a supported finding of fact cannot be disturbed by an appellate tribunal.

It next is contended by the appellant that although by the terms of the statute the tax originally and primarily is imposed upon the retailer, the intention of the legislature in enacting the statute, as is manifested by its entire language, was and is that in reality the consumer should pay the tax. In support of such contention the appellant not only cites numerous authorities from each of several jurisdictions throughout the United States, wherein statutes of similar character have been in question, but also' considers and to some extent distinguishes the several precedents established by each of several of the appellate courts of this state which are at variance with its view of the issue thus presented. But however forceful may be the argument of counsel who represent the appellant, or however persuasive may be the several conclusions that heretofore have been reached by courts of other jurisdictions, the fact remains that in each of the criticized adjudications that have been made by the courts of this state with reference to the issue,—apparently following a full and fair presentation to such courts of the identical point here in question, in each instance it has been ruled contrarily to the conclusion to which counsel now would have this court arrive. Nor, aside from the impelling effect of such authorities of our own state, in substance, that the tax was intended to be imposed upon the retailer, is this court convinced that the fiction of “legislative intent” was that the consumer or purchaser of personal property, sold at retail, should directly pay a tax that, according to the title of the act, was imposed “for the privilege of selling tangible personal property”, and which act, by its express language provides that “For the privilege of selling tangible personal property at retail a tax is hereby imposed upon retailers.

The several precedents that have been established by the courts of this state for the rule that the tax is imposed upon the retailer, and not upon the consumer, are as follows: People v. Herbert’s of Los Angeles, Inc., 3 Cal. App. (2d) 482 [39 Pac. (2d) 829]; Rio Grande Oil Co. v. Los Angeles, 6 Cal. App. (2d) 200 [44 Pac. (2d) 451]; Graham Bros., Inc., v. Los Angeles, 6 Cal. App. (2d) 203 [44 Pac. (2d) 452]; Roth Drug, Inc., v. Johnson, 13 Cal. App. (2d) 720 [57 Pac. (2d) 1022]. And to that number should be added that of Meyer Construction Co. v. Corbett, 7 Fed. Supp. 616, which was decided by the United States District Court. But even those cases do not constitute a complete list of the authorities in this state which deal directly and conclusively with the point at issue. The case of Western Lithograph Co. v. State Board of Equalization, ante, p. 156 [78 Pac. (2d) 731], reinforced by each of the companion cases of identical title, numbered respectively, S. F. 15915 and S. F. 15916, very recently decided by this court, is likewise clearly to the effect that the tax is a direct obligation upon the retailer for his privilege to conduct a retail business. The point here at issue is so thoroughly considered in the first of those cases that it becomes unnecessary to now devote further attention to that question.

However, the question of the legal right of the retailer to “pass on” to the consumer a tax which by the terms of the statute has been imposed directly on the retailer remains for consideration. As hereinbefore has been set forth, section 4 of the statute contains the provision that, “In any ease where tangible personal property is sold at retail under a contract made prior to the effective date of this act, which specifies and fixes the sale price and such sale is taxable under this act, the seller may add the tax imposed by this act to the sale price and collect it from the buyer.” Other language employed in the statute, although not containing direct authorization of the retailer to collect the tax' from the purchaser, also impliedly gave him that right.

It is undisputed that each of the several sales of the commodity, which is the subject matter of the instant inquiry, was made pursuant to and “under a contract made prior to the effective date of this act” and that the “sale price” of such commodity was specified and fixed by the provisions thereof. It therefore is clear that as far as legislative enactment is concerned, the ice company was fully authorized to add to the sale price of the ice which it sold to the express company the tax which, by the terms of the same statute had been directly imposed on the ice company as the seller and retailer of such ice. But in that connection, although no “actual controversy” exists between the respective parties as to the existence of such statutory authorization of the ice company to “pass on” the tax to the express company or to collect it (“as far as the same can be done”), it is urged that such direction or mandate is violative of the “due process” clause of both the state and the federal Constitutions with reference to the fundamental right of ownership of property. At the outset, it is commonly conceded by the appellant and the respondent that, as affecting a transaction of the character of a sale of “tangible personal property” it would have been within the power of the legislature to have imposed a tax upon either the retailer or the purchaser of such property; but in that connection, even if any controversy may be said to exist as between the parties hereto, the only possible difference of opinion between them relates to the constitutionality of the provisions of section 4 of the act, which, in effect, is that with reference to a contract “made prior to the effective date of this act” the purchaser of tangible personal property may be compelled to reimburse the retailer thereof for money paid or to be paid by him as a tax “for the privilege of selling” such property. No authorities are cited by either of the parties to this appeal pertinent to the point thus tentatively suggested for consideration by this court.. In effect, respondent confidently has asserted that as applying to such a situation no authority is required; and in the same connection, the appellant makes the statement that “We take it that there is a clear violation of due process to provide by statute that a tax originally and ultimately imposed on and payable by one person shall be paid by another. On the other hand, unless there is a legal right in the seller to collect and an ultimate legal liability on the purchaser to pay the sales tax or the amount thereof, the state may not provide that the seller ‘shall collect’ the tax or the amount thereof from the purchaser and provide penalties for failure to secure such payment.”

As a legal deduction, it has been judicially declared that a tax constitutes a debt owed by the person upon whom such tax has been legally imposed; and aside from equitable considerations (which here are not involved), to baldly legislate that without, and in the absence of either due or any process of law, a legal debt that is owed by one person must be paid by another, is quite at variance with ordinary notions of that which may be termed the administration of justice. It therefore may be deemed concluded, that as far as may concern the particular or any other provision of the statute to which attention hereinbefore has been directed, which purports either directly or indirectly to authorize the retailer of “tangible personal property” to collect from or to charge to the purchaser thereof the tax imposed upon its retailer “for the privilege of selling” such property, is unconstitutional and consequently invalid. But it should be noted that it is not because of any asserted or assumed lack of power in the state in the first instance to impose a tax on a purchaser of “tangible personal property” that the invaliditjr of the several provisions of the statute is adjudged, but rather for the reason that having first directed the imposition of a tax on the retailer of such property, by the terms of the statute he is authorized to compel the purchaser to assume the retailer’s direct liability in that .regard, that the unconstitutionality of the several provisions of the statute is made to appear. However, such declaration of the law is not intended to indicate the illegality of authority which may be lodged in a retailer to “pass on” the tax to a purchaser with the latter’s consent thereto, either expressly or impliedly given. That sort of arrangement between interested parties, in such a sale is not here involved.

It should be remembered that the record herein discloses the fact that although originally the state (acting through its board of equalization) was a party to the proceedings in the lower court, by reason of the additional fact that the state’s demurrer to the complaint was sustained “without leave to amend”, thereafter the state ceased to be a party to the proceeding. Nor is it represented in any way on the hearing of the instant appeal. For that reason, the propriety of the rendition of that which might be termed an “ex parte” decision by this court upon questions that are not properly before this court in this proceeding, and which may be of vital importance to the interest of the state in matters that may or do affect the collection of revenue for the benefit of the state, is more than doubtful. Strictly speaking, as between the parties to the contract, the only ultimate question properly at issue is whether the plaintiff has the legal right to collect from the defendant the tax that by the provisions of the statute is imposed on the plaintiff. However, since possibly to a limited extent, some of the less difficult of those questions may appear to relate to the main issue that constitutes “an actual controversy” (sec. 1060, Code Civ. Proc.) between the respective parties thereto, and the probability that none of the several rulings which will be made thereon should adversely affect the interest of the state, they will be accorded consideration, to wit:

In substance, it is contended by the appellant that should the decision by this court be to the effect that the retailer only is liable for the payment of the tax', and that in the absence of any agreement on the part of the consumer or purchaser that he will assume that burden, he is under no legal liability to do so,—with the result, as hereinbefore has been indicated, that as far as the statute in question may purport to create in the retailer a legal right to reimburse himself from the “consumer” for the payment which the retailer has made of any tax, is unconstitutional,—the consequence is that the entire act may be invalid. The reason that is assigned by the appellant for such suggestion is that that portion of the act which this court here decides is unconstitutional is “non-separable” from the remainder of the act. Respecting that subject, the rule is well established that where it clearly appears that the rejected portion of a statute is so connected and intermingled with the remainder thereof that, in substance, when such objectionable part is excluded, it will be impossible to give effect to the manifest scope of the statute, the entire act must fall. But in itself, section 34 of the statute would seem a sufficient answer to appellant’s contention, in that it provides that: “If any section, subsection, clause, sentence or phrase of this act which is reasonably separable from the remaining portions of this act is for any reason held to be unconstitutional, such decision shall not affect the remaining portions of this act. The Legislature hereby declares that it would have passed the remaining portions of this act irrespective of the fact that any such section, subsection, clause, sentence or phrase of this act be declared unconstitutional.”

Furthermore, a comparison of the objectionable portion of the instant statute both with the title and the body thereof, impels the conclusion that the scope and the design of the statute will remain unharmed and unaffected by reason of the elimination therefrom of the unconstitutional provision here under consideration. As indicated by its title, the general purpose of the act is to impose a tax “for the privilege of selling tangible personal property . . . and by section 3 of the act it is expressly provided that such tax “is hereby imposed upon retailers . . . ”;—and of which, together with its various incidents remains intact and unimpaired. It follows that appellant’s contention in that regard cannot be sustained.

Notwithstanding the several conclusions that the tax is a liability imposed on the retailer of “tangible personal property”, which without and in the absence of either the express or the implied consent of the purchaser, may not be “passed on” to the latter, the appellant urges the point that for the reason that the sale which was made by it to the respondent was pursuant to and in accordance with the terms of a contract which was entered into between the respective parties at a date which preceded that upon which the statute became operative—the effect of the statute, if the appellant be obliged to pay the tax, may be that it is discriminatory as to it, and that the statute may impair the obligation of the contract which was entered into by the appellant with the respondent in that it has the effect of decreasing the sale price of the ice which the appellant has contracted to deliver to the respondent at a specified and fixed compensation therefor. With reference to the asserted discrimination against the appellant, it is suggested that if under the general provisions of the act other retailers be permitted to “pass on” the tax to their respective purchasers, and the appellant be not so privileged, the former will be granted an advantage which is withheld from the appellant. But as far as may be ascertained, no such variance in treatment of different respective retailers will ensue. Had the provisions of section 4 of the act been upheld as valid, it is not impossible that other retailers might feel themselves aggrieved by reason of a preference which might be asserted by them to exist in favor of the appellant; but with the elimination from the statute of the provisions of section 4 thereof, the result is that the appellant is placed at least on an equality with all other retailers. Regarding the point that as to sales of ice made by the appellant “under a contract made prior to the effective date of this act”, the imposition of a "tax on the retailer will have the effect of lessening the sale price of such ice, and consequently will impair the obligation of such contract, it need only be said that the principle of law is well established that the existence of an executory contract between or among two or more individuals presents no obstacle to the right or power of the state to levy or to impose a tax which may adversely affect the financial interests of either or any of the parties which may have been acquired under or by reason of the mutual covenants of such parties to the contract. An excerpt from one eminent authority will suffice to illustrate the rule. In the dissenting opinion in the ease of Coolidge v. Long, 282 U. S. 582, at page 638 [51 Sup. Ct. 306, 75 L. Ed. 562], the following pertinent language occurs: “In short, it is evident from the authorities cited, and many more which might be quoted, that the power to tax property, or a right, or a status, or a privilege, acquired or enjoyed by virtue of a contract, is in nowise hindered or impeded by the fact of the existence of the contract whether it antedates or follows the effective date of the taxing act. No exercise of a governmental power, whether it be that of taxation, police, or eminent domain, though it make less valuable the fruits of a private contract, can be said to impair the obligation thereof.”

With reference particularly to its own situation as the imposition of the tax' may affect it, the appellant presents several other objections to either the validity or the enforcement of the statute; none of which in any degree may be said to be strictly germane to a determination of the rights of either of the respective parties to this proceeding, with relation one to the other; and since a decision as to any or either of such objections might greatly affect not only the interest of the state, but as well that of many others who may occupy a position with reference to the imposition of the tax similar to that either of the appellant or the respondent, none of whom is represented in this proceeding, it is deemed inadvisable that consideration be given by this court to any or either of such objections.

The judgment is affirmed.

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


source: Caselaw Access Project

license: Public Domain

text:
    [S. F. No. 15982.
    In Bank.
    May 2, 1938.]
    THE PEOPLE, Respondent, v. WILLIAM C. McDUFFIE, as Receiver, etc., Appellant. THE PEOPLE, Plaintiff, v. WILLIAM C. McDUFFIE, as Receiver, etc., Defendant, Cross-Complainant and Appellant; AMERICAN-HAWAIIAN STEAMSHIP COMPANY (a Corporation) et al., Cross-Defendants and Respondents.
    [S. F. No. 15804.
    In Bank.
    May 2, 1938.]
    Robert E. Paradise, Gibson, Dunn & Crutcher, Henry F. Prince, Homer D. Crotty and David P. Evans for Appellant.
    Gavin McNab, Schmulowitz, Wyman, Aikins & Brune, Nat Schmulowitz, H. M. Hammack, Schauer, Ryon & McMahon and Leo T. McMahon, as Amici Curiae, on Behalf of Appellant.
    U. S. Webb, Attorney-General, H. H. Linney and James J. Arditto, Deputies Attorney-General, and Hengstler, Dorr & Stevenson for Respondent.
   HOUSER, J.

On July 31, 1933, an act known as the “Retail Sales Act of 1933” (Stats. 1933, p. 2599) became effective. Particularly by the provisions of section 3 thereof, a tax was imposed on retailers of “tangible personal property”. In effect, section 4 of the act provides that where a retail sale is made “under a contract made prior to the effective date of this act, ... the seller may add the tax imposed by this act to the sale price and collect it from the buyer”. Although the statute contains several other provisions which, considered either singly or as a whole, may be regarded as indicative of the intention of the legislature in passing the act as to whether the tax should be borne directly by the retailer, or whether the retailer should be entitled to compel payment thereof by the purchaser,-—in the main, the provisions to which attention has been directed are controlling.

Richfield Oil Company is a producer of oil. Some time “prior to the effective date of this act”, under the terms of a contract that had been entered into between Richfield Oil Company and each of several “consumers” of oil, the former agreed to sell to each of such “consumers” large quantities of oil. Respectively, both before and after the statute took effect, in accordance with a provision of each of said contracts, Richfield Oil Company delivered to each of such “consumers” many thousand gallons of oil at the price fixed in each of said respective contracts. No tax was paid on account of either or of any of such sales, either by Rich-field Oil Company to the state, or by either or any of such “consumers” to Richfield Oil Company. Thereafter, and in assumed due course, in the lower court an action was brought by the state against William C. McDuffie, as receiver, etc., of Richfield Oil Company, to recover the amount of tax that had become due to the state on account of such sales of oil. Thereupon, by leave of the court, the defendant in the action filed a cross-complaint against each of the said “consumers” for the purpose of recovering the amount of tax which it was alleged had become due to Richfield Oil Company on account of a sale or sales of oil made by it to such “consumer” and for which the state was endeavoring to collect from Richfield Oil Company. To that cross-complaint each of the cross-defendants filed a general demurrer, which was by the court sustained “without leave to amend”. From the ensuing judgment in favor of such cross-defendants, Rich-field Oil Company appealed to this court. Thereupon the original case went to trial, with the result that the state was awarded a judgment against Richfield Oil Company. From the judgment that was thus rendered, Richfield Oil Company has also appealed.

The principal and deciding issues in each of such appeals are whether, in circumstances such as hereinbefore have been indicated to exist, a retailer of “tangible personal property” is directly and solely liable to the state for the tax that is imposed upon him for “sales” that he may make; also whether the retailer has a legal right to ‘ ‘ add the tax ... to the sale price and collect it from the buyer”.

Each of such questions is decisively answered in the appeal in the case of National Ice & Cold Storage Co. v. Pacific Fruit Express Co. (ante, p. 283 [79 Pac. (2d) 380]), this day decided by this court. No useful purpose would be served by a repetition here of the reasons there given for the conclusions therein reached by this court.

The judgments are and each of them is affirmed.

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

Rehearing denied.


author: LANGDON, J.

text:
    [S. F. No. 15883.
    In Bank.
    May 2, 1938.]
    In the Matter of the Estate of THOMAS SHERWOOD GAINFORT, Deceased. NICHOLAS BARRON, as Administrator, etc., Appellant; CAROLINE PARISH, Respondent.

      Llewellyn Toland, William John McMahon and Theodore Tamba for Appellant.
    Norman H. Elkington for Respondent.
   LANGDON, J.

This appeal is taken from orders of the trial court denying approval, allowance and settlement of the first and final account of an administration, sustaining exceptions to said account, revoking letters of administration with the will annexed, and directing payment of funds to the successor of said administrator.

Thomas Sherwood Gainfort died a resident of Dublin, Irish Free State, on August 15, 1932. He left a will which was probated in Dublin. On October 24, 1934, Nicholas Barron was appointed ancillary administrator of the estate in San Francisco. On April 3, 1936, he presented his report and petition for settlement of first and final account, in which it appeared that he had received the sum of $6,780.83, and after paying certain charges, had remitted the greater part of said stun, $5,786.91, to the executors in Ireland. Notice of hearing was given, and on April 14, 1936, Caroline Parish filed exceptions and a petition for revocation of letters. She alleged that the decedent left an estate of about $50,000 value, with property in San Francisco in the amount of $6,712.36; that one John Gainfort, son of the decedent, was a residuary legatee under the will; that said son was serving a term of imprisonment in San Quentin penitentiary for embezzlement from four persons who held a judgment for $10,000 against him; that these persons had assigned their claim to her; that she had levied execution on his interest in the estate, and consequently was a person interested and entitled to except to the account.

At the hearing it was disclosed that the deputy sheriff who sought to serve the writ of attachment on the administrator called at his law office on April 16, 1935, and for several days thereafter, but was unsuccessful in locating him. Meanwhile the notice of attachment was filed with the clerk of the probate court, and presumably Mr. Barron, the administrator, was aware of this. On April 17th, while the officer was trying to locate him, Mr. Barron sent practically all funds of the estate, namely, the sum of $5,786.91, to the executors in Ireland. This was before the period for notice to creditors had elapsed, and without notice to anyone, or consent of the court. In the account, filed nearly a year later, no mention was made of this obvious attempt to escape the levy. It further appeared that John Gainfort, while incarcerated, had made an assignment of his interest in the estate to his wife, for consideration of love and affection, and that she had left the state. Mr. Barron, the administrator, had also departed.

Upon this showing the judge of the probate court, after severely condemning the fraudulent conduct of the parties, denied approval of the account, sustaining exceptions thereto, and revoked the letters of administration. The administrator then brought this appeal.

The position of appellant is that we should ignore the above facts and decide the matter on the following technical propositions: First, that the contestant, a mere creditor of a legatee, has no interest sufficient to file exceptions or. seek revocation of letters; and, second, that an ancillary administrator may in good faith, after all claims and expenses are paid, transfer funds of the estate to the domiciliary executor or administrator without order of court. The briefs contain considerable discussion of these matters, particularly the question whether by the attempted levy of the attachment, petitioner acquired an interest sufficient to seek this relief. However, it is conceded that the court has power itself to revoke letters upon mismanagement by an executor or administrator (Probate Code, see. 521), and certainly it is the duty of the court to scrutinize the accounts of the personal representative. We have here a successful effort by the legatee, his wife as gratuitous assignee, and the administrator, to remove funds of the estate from this jurisdiction. The circumstances under which this was done raise an overwhelming inference of fraud, which is not dispelled by the assertion that the administrator acted in good faith. In our opinion, the court was fully justified in removing the administrator and in refusing to settle the account.

The orders appealed from are affirmed. Motion to dismiss appeal is denied.

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

Rehearing denied.


author: WASTE, C. J.

text:
    [L. A. No. 16497.
    In Bank.
    May 20, 1938.]
    JEANETTE BORENSTEIN, Respondent, v. DAVID BORENSTEIN, Appellant.

      Albert A. Albeck for Appellant.
    Nat Recht for Respondent.
   WASTE, C. J.

Motion to dismiss an appeal from an order denying motion to vacate, set aside, and annul an interlocutory and final decree of divorce on the ground that the appellant did not obey a court order to pay counsel fees and costs to respondent.

The parties have been divorced. Defendant moved the trial court to vacate and set aside the interlocutory and final judgments herein on the grounds that plaintiff wife had not been residing in this state for one year prior to the filing of her action, and that the parties had already been divorced by decree of a Mexican court. The motion to vacate was denied. Defendant appealed from the order by notice filed August 14, 1937.

The printed transcript was filed herein on September 18, 1937. The opening brief was filed October 11, 1937. One stipulation shows that respondent was granted until December 10, 1937, to file her brief. No further extensions appear. The brief of respondent has not been filed.

Prom the moving papers it appears that on October 21, 1937, an order was made by the trial court requiring appellant to pay to respondent the sum of $300 as and for attorneys’ fees in defense of the appeal, and the further sum of $50 for costs. Payment was to be made forthwith. This order was entered after the filing of the transcript and brief herein, but was one which the trial court had jurisdiction to make. (Bruce v. Bruce, 160 Cal. 28 [116 Pac. 66]; Dunphy v. Dunphy, 161 Cal. 87, 92 [118 Pac. 445].)

Upon the sole ground that the order allowing attorneys’ fees and costs has not been complied with, respondent now moves to dismiss the appeal. We are cited to no authority or statements of fact which would justify a dismissal on such grounds. There does not appear to be any merit in the present motion. A motion to secure a stay of proceedings until appellant shall comply with the order requiring the payment of attorneys’ fees and costs, if made, would afford a proper remedy. (Allen v. Superior Court, 133 Cal. 504 [65 Pac. 977].)

The motion to dismiss the appeal is denied.

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


author: CURTIS, J.

text:
    [L. A. No. 16562.
    In Bank.
    May 24, 1938.]
    WALTER GEORGE, Appellant, v. CITY OF LOS ANGELES (a Municipal Corporation) et al., Respondents.

      Bradner & Weil and Jerold E. Weil for Appellant.
    Ray L. Chesebro, City Attorney, Frederick von Schrader, Assistant City Attorney, Leonard Husar and Bourke Jones, Deputies City Attorney, LeRoy M. Edwards and Neil G. Locke for Respondents.
    Ray L. Chesebro, City Attorney, S. B. Robinson, Chief Assistant City Attorney for Water and Power, Mark A. Hall, Assistant City Attorney, and Wendall Mackay, Deputy City Attorney, as Amici Curiae, on Behalf of Respondents.
   CURTIS, J.

Plaintiff commenced this action to obtain compensation for damages alleged to have been suffered when his automobile was caused to leave a public street in the City of Los Angeles and to strike poles which had been erected by defendant Los Angeles Gas and Electric Corporation. Both the City of Los Angeles and the Los Angeles Gas and Electric Corporation were named parties defendant. Each defendant filed a demurrer and both demurrers were sustained without leave to amend. From the resulting judgment plaintiff appeals.

From the allegations in plaintiff’s complaint it appears that on April 11, 1936, plaintiff was driving his automobile in a northerly direction along Allesandro Street in the City of Los Angeles in a careful and prudent manner. Bosebud Avenue runs into Allesandro Street from the east but does not cross Allesandro Street. The space at the intersection is referred to, apparently for lack of a better expression, as the “triangular portion”. Plaintiff further alleged that the street was in a dangerous and defective condition; that a dip or depression had been constructed in the street which was such as to cause automobiles proceeding northerly to be thrown from their intended course of travel and into and upon the curbing along the easterly side of said street; the dip or depression lay within the triangular portion of Allesandro Street and consisted of a downward pitch or grading toward the easterly curb and reaching its lowest point at a storm drain which extended approximately nine feet along the curb and two and one-half feet out into the traveled portion of the street; the cement-paved portion of the street had no appreciable slope or pitch toward the curb, but that within the triangular portion the street pitched curbward until the drop became such that, beginning at a point eight feet out in the street from the curb and opposite the storm drain, the street dropped downward toward the curb at such an angle that it was approximately eleven inches lower at the curb than at a point eight feet out from the curb; the street was sixty feet wide and perfectly straight for more than one thousand feet southerly of the place of the accident where the street narrowed from sixty feet to forty feet; the easterly curb line was perfectly straight for over one thousand feet south of the place of the accident, where the curb deviated and curved in a direction westerly; the street was paved in cement lanes or strips southerly of the triangular portion referred to, but the two most easterly lanes terminated at the beginning of the triangular portion, and said triangular portion was paved with dark asphalt; two “telephone” poles stood within one foot of the curb at the scene of the accident; there was insufficient light at night to reasonably illuminate the locality; no warning signs of any kind were in place; the conditions were such as to create a hazard that persons traveling northerly on said street at night in either of the two cement lanes or strips nearest the right-hand curb would be led to believe that said street continued straight ahead, but would find that the light-colored cement lanes or strips would suddenly terminate, and the roadway would apparently “blank out”, and by reason of the manner of paving, lack of warning signs, change in course of direction of curb line, and dip or depression, an automobile would be caused to strike said easterly curb, leave the traveled portion of said street, and strike one or both of said poles; that the dip or depression was so located and so graded as to create a hazard that should an automobile enter into or upon the dip, the driver would be prevented from turning his automobile to the left to avoid colliding with the curb, but, on the contrary, the dip or depression wpuld cause the automobile to swing to the right and strike the curb, leave the traveled portion of street and strike one or both of the poles; by reason of the said dangerous and defective condition and the negligence and failure of the officials of defendant city, plaintiff’s automobile was caused to leave the traveled portion of the street and crash against the poles of defendant company. Plaintiff further alleged the filing of a verified written claim with the officials of defendant city and the rejection of the claim; and that defendant city and its officers had knowledge and notice of the dangerous and defective condition of the street for several Shears prior to the day of the accident.

The action is brought under the so-called Public Liability Act of 1923 (Stats. 1923, chap. 328, p. 675), which provides in section 2 thereof that municipalities “shall be liable for injuries to persons and property resulting from the dangerous or defective condition of public streets”. This statute has frequently been before this court and also the District Courts of Appeal of the state. The purpose and scope of the statute have been fairly settled by the decisions hereinafter cited.

In support of the ruling of the trial court in sustaining the demurrer of the City of Los Angeles, respondent city contends that where the injury is caused by a particular plan of improvement adopted and carried out by a municipality, no cause of action against the municipality exists unless the plan adopted is beyond reasonable grounds arbitrary and palpably dangerous. While this may be the rule in some other jurisdictions as indicated by the authorities cited by said respondent, in view of the Public Liability Act of 1923, this rule cannot have any controlling force in this state. The statute, as we have already indicated, makes municipalities liable for injuries resulting from dangerous or defective conditions of its public streets under certain conditions set forth in said statute. We find nothing in these conditions which requires any different rule to be applied in a ease where the dangerous or defective condition is the result of a plan of construction adopted by the city than in a case where such condition results from the street being permitted to remain out of repair after its construction under some general plan adopted by the municipality. Since the enactment of the Public Liability Act of 1923, numerous cases have been before this and the several District Courts of Appeal in which the municipality has been held liable in damages for injuries arising from the construction of the sidewalk or street when such construction created a dangerous or defective condition in the sidewalk or street. (Rafferty v. City of Marysville, 207 Cal. 657 [280 Pac. 118]; Bennett v. Kings County, 124 Cal. App. 147 [12 Pac. (2d) 47]; Uttley v. City of Santa Ana, 136 Cal. App. 23 [28 Pac. (2d) 377].)

In the following cases the same question was before the court: Rodkey v. City of Escondido, 8 Cal. (2d) 685 [67 Pac. (2d) 1053], and Wilkerson v. City of El Monte, 17 Cal. App. (2d) 615 [62 Pac. (2d) 790], While the judgment in each of these cases in favor of the injured party was reversed, the reversals were not on the ground that the alleged dangerous condition in the street resulted from the improper construction, but for the reason that the defect was so trivial as not to charge the city with constructive notice of its dangerous character. We, therefore, find nothing in the Public Liability Act of 1923, or in any of the cases decided since its enactment, which justified the contention of the respondent city that in eases arising under said statute, where the injuries are caused by reason of the defective construction of an improvement under a general plan adopted by the city, the latter is not liable unless the plan adopted is arbitrary and palpably dangerous beyond all reasonable doubt.

The rule adopted by the courts of this state is that while a municipality is not an insurer of the safety of travelers on its streets, the duty is imposed upon it by the Public Liability Act of 1923 to exercise ordinary care to maintain its streets in a reasonably safe condition for their use in a proper manner. (Rodkey v. City of Escondido, supra, Nicholson v. City of Los Angeles, 5 Cal. (2d) 361 [54 Pac. (2d) 725], Waldorf v. City of Alhambra, 6 Cal. App. (2d) 522 [45 Pac. (2d) 207], Beeson v. City of Los Angeles, 115 Cal. App. 122 [300 Pac. 993], and Brooks v. City of Monterey, 106 Cal. App. 649 [290 Pac. 540].) While as a general proposition the acquisition, construction, maintenance and repair of roads and streets are undisputed functions of the government, and a municipality reserves the right to change its street improvement system when it is reasonably wise to do so, yet if in the discharge of this function or in the exercise of this right, it creates a dangerous and defective condition in its public streets, it is liable for any “injuries to persons or property resulting from” such condition provided it had knowledge of such condition and failed or neglected to remedy said condition within a reasonable time after acquiring-such notice. This is the construction placed upon the Public Liability Act of 1923 by the courts in Rafferty v. City of Marysville and kindred cases cited above. This liability is one for negligence (Whiteford v. Yuba City Union High School Dist., 117 Cal. App. 462, 464 [4 Pac. (2d) 266]; Brooks v. City of Monterey, 106 Cal. App. 649, 654 [290 Pac. 540]), and the question of the municipality’s negligence is for the determination of the jury. (Norton v. City of Pomona, 5 Cal. (2d) 54 [53 Pac. (2d) 952].)

It is contended by the respondent city that this conclusion gives to the jury, or to the trial court when the case is tried without a jury, the right to pass upon the discretion of the municipal authorities to adopt a system or general plan of improvement of its streets, sidewalks', or other public works. We do not consider that our conclusion goes to that extent. We simply hold that under the statute the municipality is liable for injuries resulting from the dangerous or defective condition of its public street, whether such condition arises from the construction of said street in the first instance, or is due to a defect created therein after its construction.

■ Great reliance is placed by the respondent City of Los Angeles upon the two recent cases of Waldorf v. City of Alhambra, supra, and Robertson v. City of Long Beach, 19 Cal. App. (2d) 676 [66 Pac. (2d) 167]. In each of these cases the injury was caused by a collision of an automobile with a “jog” or “offset” in the street along which the automobile was being operated. It was held in the Waldorf case, and followed in the other cited case, that there is no law of this state which requires a municipality to maintain barriers or warning devices at “jogs” or “offsets” in the streets of the municipality; that in almost every city of size in the state, some streets are laid out and improved without uniformity as to width or direction, resulting in “jogs” or “offsets” and that where there is nothing in the construction of such a street to conceal its real condition, no liability attaches to the municipality for injuries arising out of such construction.

The factual situation in each of these two cases differs materially from that existing in the present action. It is well settled in this state that when dealing with eases falling under the provisions of the Public Liability Act of 1923, each of such cases must depend upon its own state of facts and that no hard-and-fast rule can be applied in the great majority of cases. (Rafferty v. City of Marysville, supra, at page 660; Waldorf v. City of Alhambra, supra, at page 526; Hook v. City of Sacramento, 118 Cal. App. 547 [5 Pac. (2d) 643].) In each of the Waldorf and Robertson cases, as we have seen, the claimed dangerous condition was a “jog” or “offset” in the street at its intersection with a cross-street, where the abutting property extended beyond the property line on the opposite side of the cross-street. The abutting property was surrounded by a curb some six inches in height, and there was also a sidewalk and parkway within the curb line. These, the court held, constituted barriers or warnings sufficient to avert disaster and readily visible to the driver of an approaching automobile. The defective and dangerous condition which it is alleged existed in the street involved in the present action was within the street itself. The storm drain was constructed as a part of the street and in the traveled portion thereof. There was no barrier between it and any other part of the street to warn those traveling over the street of its existence. It was not only lower than the surrounding area of the street, but there was a gradual and somewhat precipitous slope from near the center of the street into the drain, so that the course of one approaching this area from a southerly direction would be diverted toward the curb and into the dip or drain and then against and over the curb. This condition was rendered more dangerous by the gradual narrowing of Allesandro Street, so that the curb along the easterly side of said street for some distance on either end of the storm drain did not run parallel with the center of the street but inclined in a westerly direction toward the center of the street. Due to this deviation in the curb, if an automobile were forced into the storm drain, it would be much more liable to collide with the curb than if the line of the curb at that point were parallel with the center of the street. This condition in the street was rendered still more hazardous by reason of the insufficient lighting of the street and the change of the color of the material used in the construction of the street from the light-colored concrete or cement used southerly of the intersection to the dark asphalt in the intersection and in that portion of Allesandro Street in which the storm drain is located. By reason of the marked difference in the factual situation in the present case from those shown to have existed in the ease of Waldorf v. City of Alhambra, supra, and Robertson v. City of Long Beach, supra, we are unable to agree with the respondent city that the decisions in those eases are determinative of the issues involved in the instant case. As the complaint in this case set forth facts showing the existence of a dangerous and defective condition in Allesandro Street, together with notice of such condition by the officers of the city and their failure to remedy such condition, it met all requirements of the statute, and was not vulnerable to a general demurrer. The court, therefore, erred in sustaining said demurrer.

In the complaint it is alleged that the respondent, the Los Angeles Gas and Electric Corporation, constructed, and on the day of the accident maintained, two “telephone” poles on the easterly side of Allesandro Street and inside and within one foot of the easterly curb line of said street. One of said poles was approximately forty feet northerly of the north line of Rosebud Avenue and the other was approximately one hundred and forty feet northerly from said first-mentioned pole. It is further alleged in the complaint “that the maintenance of said poles and each of them in their respective locations was careless and negligent, and they and each of them were carelessly and negligently maintained without markings or warning signs of any kind, and were carelessly and negligently maintained so close to the traveled portion of said Allesandro Street as to constitute a hazard to persons traveling by automobile in a northerly direction along said Allesandro Street at and near said intersection; that said defendant Los Angeles Gas and Electric Corporation could have and should have reasonably anticipated that because of the hereinbefore alleged dangerous and defective condition of said Allesandro Street at and near said intersection, of which condition said last-mentioned defendant had full knowledge, automobiles might be caused to leave the traveled portion of said Allesandro Street and strike against said poles, thereby causing injury to person and property; that said defendant Los Angeles Gas and Electric Corporation nevertheless negligently and carelessly maintained said poles and each of them at said respective locations, and negligently and carelessly failed to place thereon or on either of them any markings or warning sign whatever.

In paragraph VI of said complaint, it is alleged that due to the negligence of the two respondents, as in said complaint alleged, plaintiff’s automobile “was caused to leave the traveled portion of said Allesandro Street and to crash against and collide with said two poles ’ ’ and by reason thereof plaintiff sustained the injuries for which he seeks in this action to recover damages.

We can see no substantial difference in the factual situation in this case in so far as it relates to the respondent Los Angeles Gas and Electric Corporation, and that set out in the case of Norton v. City of Pomona and Southern California Edison Co., 5 Cal. (2d) 54 [53 Pac. (2d) 952], in which the Edison Company was held liable for damages sustained by Mr. and Mrs. Norton when the automobile which they were operating, by reason of a dangerous condition in the street, ran upon and over the curb and crashed into a pole maintained by the Edison Company within but flush with the curb along said street. In sustaining the judgment of the trial court in favor of the plaintiffs in said action and against the Edison Company, we held as follows: “Herein plaintiffs sued upon the theory of negligence—not that of nuisance—and contend that the City of Pomona negligently permitted a dangerous and hazardous condition of a public street to exist, and that the Edison Company negligently maintained a pole in such dangerous place, the two acts concurrently operating to proximately cause the injuries to plaintiffs. In this case it became a question of fact for the court to determine whether under the circumstances shown the maintenance of the pole and the street, separately or together, constituted negligence on the part of either or both defendants (Barrett v. Southern Pacific Co. (207 Cal. 154 [277 Pac. 481]), supra), and whether such negligence, if any, proximately caused the injuries to plaintiffs, without contributory negligence on their part. The evidence establishing the facts and circumstances herein is such that reasonable minds might draw different and opposite inferences both as to negligence and contributory negligence. The court found that the defendant Edison Company negligently erected and maintained the pole in the place shown, that such placing and maintaining constituted a hazard to the traveling public and caused the happening of the collision, and that there was no negligence on the part of plaintiffs contributing thereto. There was ample evidence to support the conclusions deduced therefrom by the court, and under the well-known rule these findings are binding and conclusive on this appeal and cannot be substituted by any of our own deductions.”

Said respondent-seeks to distinguish that case from the instant case by pointing out that in the Norton ease the pole was flush with the curb while in the instant case the poles were approximately one foot from the curb. This effort, in our opinion, has not been successful. In each case there was a dangerous condition in the street which caused the automobile traveling along the street to leave the main traveled portion thereof and to run upon and over the curb and along the parkway within the curb line. Evidently the automobile after running over the curb would have crashed into the pole whether the pole was located one foot within, or flush with the curb. In the case of Gerberich v. Southern California Edison Co., 5 Cal. (2d) 46 [53 Pac. (2d) 948], the pole into which the plaintiff crashed was located some six feet from the traveled and paved portion of the roadway. Yet the defendant utility company was held negligent in its maintenance. The Gerberich ease is strongly relied upon by the appellant, and we think the ruling therein, together with that found in the Norton ease, fixes a liability upon the respondent Los Angeles Gas and Electric Corporation for the negligent maintaining of said pole in the manner stated in the original complaint. The following additional cases furnish further authority in support of this conclusion: Stewart v. San Joaquin Light & Power Corp., 44 Cal. App. 202, 207 [186 Pac. 160]; Carroll v. Central Counties Gas Co., 74: Cal. App. 303, 307 [240 Pac. 53]; Lim Ben v. Pacific Gas & Elec. Co., 101 Cal. App. 174, 179 [281 Pac. 634]; Barrett v. Southern Pac. Co., 207 Cal. 154, 160 [277 Pac. 481].

The judgment as to each defendant is reversed.

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

Rehearing denied. Shenk J., and Houser, J., voted for a hearing.


author: THE COURT.

text:
    [L. A. No. 15775.
    In Bank.
    May 25, 1938.]
    In the Matter of the BANK OF SAN PEDRO (a Banking Corporation), in Liquidation. FRIEND W. RICHARDSON, as Superintendent of Banks, etc., Appellant, v. ROY P. HARPER, Respondent.

      Clock, McWhinney & Clock, Merritt D. Jergens and John G. Clock for Appellant.
    Sullivan, Roche & Johnson, as Amici Curiae, on Behalf of Appellant.
    Loucks & Phister for Respondent.
   THE COURT.

For the reason that with respect to the issue herein involved, in similar situations, a diversity of opinion appeared as between or among several respective jurisdictions, a hearing of the appeal in the instant case was ordered to be had in this court, after decision of the original appeal by the District Court of Appeal. After careful consideration of the facts of the case and the law applicable thereto, this court is satisfied with, and hereby adopts as its own, the opinion and decision that was prepared by Mr. Justice Sturtevant of the Second Division of the District Court of Appeal, First District. It is as follows:

“This is an appeal from an order authorizing and directing Friend W. Richardson, as superintendent of banks, to allow a set-off on and to accept payment of the balance due and owing on a promissory note held by an insolvent bank now being liquidated by said superintendent.
‘ ‘ The order was made and based on an agreed statement of facts. Heretofore the Bank of San Pedro was organized to conduct and was conducting a banking business consisting of a commercial department, and a savings department under the Bank Act. (Act No. 652, Deering’s General Laws.) The petitioner, Roy P. Harper, borrowed from the commercial department several thousand dollars on a collateral note secured by certificates of shares of prior preferred stock of the Van Camp Sea Food Company. About the same time he opened a savings account in the savings department of said bank. Large sums having been paid on the note, later a new collateral note was executed. On March 15, 1933, the superintendent of banks took possession of said bank, and, through a receiver now holds possession. On May 20, 1933, said petitioner Boy P. Harper owed said bank on his note for said loan $5,225, and the bank held collateral as security which was of the value of $9,000 or more. At the same time the savings department of said bank owed to said Boy P. Harper on said savings account $3,967.69. On said date last mentioned, said Boy P. Harper demanded that the bank apply on his note the balance in the savings account, tendered to the bank the balance due on said note after such credit had been allowed, and demanded the return to him of his note and the collateral so held by said bank. The demand and tender were both refused and thereafter he filed a petition in the insolvency proceeding pending in the superior court praying for the order hereinabove mentioned.

“ In presenting his appeal the superintendent of banks says: ‘There is but a single question involved: whether or not á depositor in the savings department of a state bank in liquidation may set off his deposit against a loan in the commercial department of said bank.’ The petitioner says: ‘It is better stated thus: Does the Bank Act specifically forbid the interdepartmental offset of a savings deposit against a debt owed by the savings depositor to the commercial department in determining the assets and investments of an insolvent bank ? ’

“The present Bank Act was approved March 1, 1909. (Stats. 1909, p. 87.) Prior to its enactment it had been decided that the contention which the petitioner now makes was legally sound as the law then stood. (People v. California etc. Trust Co., 168 Cal. 241 [141 Pac. 1181, L. R. A. 1915A, 299].) The question is therefore reduced to an inquiry whether anything contained in the Bank Act has changed the rule of law declared in the case cited. An examination of the decision cited, and kindred decisions, discloses that each rested on the provisions of sections 438 and 440 of the Code of Civil Procedure. The question is therefore further limited as to whether the present Bank Act has any provisions which in any respect work a repeal of said sections. A comparison of said sections with the numerous provisions of the Bank Act shows no conflict whatever. No express repeal is even suggested. Repeals by implication are not favored and the Bank Act contains no words to the effect that proceedings thereunder are an exception to the general laws governing the rules of procedure.

“The appellant calls to our attention the facts that the Bank of San Pedro was organized into departments; that the petitioner owed the commercial department; that it was the savings department which owed petitioner; and, he contends there could be no set-off. That contention is but to assert that there was no mutuality. But mutuality is not always controlling. In the instant ease it was not controlling. The day before the Bank of San Pedro was taken over by the appellant, if either the petitioner had sued the bank, or the bank had sued the petitioner, it is clear that the other could have set off his or its claim. The same condition existed in People v. California ele. Trust Co., supra. Speaking to "the point, on page 249 the court said: ‘We can perceive no reason why the principles of the decisions cited should not be applied to tlie demands here. We think it should, and that notwithstanding the respective demands are not mutual, still that, if any proceeding in the estate had been taken by the bank to collect its allowed claim prior to its insolvency, or the administrator had theretofore sued to collect the estate funds on deposit with it, the estate being solvent, the demand of one party would have been available as a set-off against the claim of the other; that the rights of the parties in that respect were reciprocal, and, as we have said, the insolvency of the bank did not affect the right of either to have this subsequently done. ’ So, here, for precisely the same reasons the insolvency of the Bank of San Pedro did not affect the right of set-off existing in either party.

‘ ‘ The appellant cites and relies on the provisions of sections 25, 26 and 27 of the Bank Act as establishing the rule for which he contends. We think they do not do so. The primary purpose in enacting the Bank Act was to protect the public. To that end, as restrictions on the officials of the bank, while it was a going concern, said sections were enacted. But neither the primary purpose in enacting said act, the history of the times, nor any other reason suggested in the briefs called for provisions taking from any single customer of the bank any of his former statutory rights such as those expressed in sections 438 and 440 of the Code of Civil Procedure. We find no language in said act which purports to do so. The petitioner cites and relies on Greva v. Rainey, 2 Cal. (2d) 338 [41 Pac. (2d) 328], It is not in point, but all we have said we believe to be in accord with that decision.” The order appealed from is affirmed.


author: EDMONDS, J.

text:
    [Crim. No. 4141.
    In Bank.
    May 27, 1938.]
    THE PEOPLE, Respondent, v. ALBERT DYER, Appellant.

      Frederic H. Vercoe, Public Defender, William B. Neeley, Deputy Public Defender, for Appellant.
    U. S. Webb, Attorney-General, James S. Howie, Deputy Attorney-General, Buron Fitts, District Attorney, Eugene Williams, Deputy District Attorney, for Respondent.
   EDMONDS, J.

The defendant who was convicted by a jury upon three separate charges of murder in the first degree, has appealed from the judgments subsequently rendered imposing the death penalty upon him.

By an indictment he was charged with the murder of three children between six and ten years of age. On the morning of June 26, 1937, the children went to a park together for play. They were seen there by various persons during the morning and until about noon. When they failed to return to their homes a search was instituted for them, which continued for two days. Their bodies were then discovered in a ravine about four miles from the park.

Practically all of the evidence connecting the defendant with the crime consists of confessions made by him. The first point relied upon for a reversal of the judgments concerns the cross-examination of a witness who testified to these confessions. Other contentions are that the trial judge erred in admitting certain testimony and in limiting the examination of witnesses.

The record shows that the defendant was arrested on July 4th and that he was questioned in the office of the district attorney that 'evening. On the following morning the district attorney and the sheriff talked with him. On the next day he was taken before the grand jury and examined by the district attorney. At this time, as on the two previous occasions, the defendant confessed that he had committed the crimes with which he was charged.

A transcript of the proceeding before the grand jury was read in evidence at the trial. It shows that in answer to questions then asked of him by District Attorney Fitts the defendant stated in minute detail not only that he had planned some days in advance to murder and ravish the children, but also how he accomplished his purposes. His story is that of a degenerate fiend. After getting the little girls to leave the park where they were playing on the pretext that he would take them rabbit hunting, he led them to the lonely place in the hills where he carried out his diabolical designs.

Appellant urges that the evidence of his alleged confessions was not admissible, because it was shown that he had been in custody and had been interrogated for a period of ten hours before he made any statements implicating himself in the crime. He did not testify upon the trial and the confessions he made stand uncontradicted. But he claims that he was not allowed to show by cross-examination the circumstances under which he confessed on the night of July 4th.

The district attorney related the conversation he had with the defendant on the morning of July 5th. He stated: “I said to Mr. Dyer that I had been present last evening when questions had been asked him, that I had participated very little in the questioning, but I was just prepared to take from him a statement myself, and before proceeding to take that statement I wanted to say a few things to him. . . . that he had said last evening that he had killed and raped these children; regardless of what he had said last evening, I told him that I wanted him now to tell me the exact situation; if he did not do it then was the time, and we were the people to whom to tell that he had not killed these children; . . . Whereupon Mr. Dyer held his hand up and said, ‘Mr. Fitts, before my God I killed them.’ ” Upon cross-examination the trial judge sustained objections to questions by which the district attorney was asked to relate replies made by the defendant when he was questioned on the night of July 4th. This ruling was correct. Such questions were not within the range of cross-examination. The district attorney testified only to the questions asked the defendant and the answers made by him when he was interrogated the next day. The fact that some of those questions referred to what Dyer had said before did not authorize cross-examination of the district attorney concerning the previous statement or the circumstances under which they were made. (See. 2048, Code Civ. Proc.; People v. Amaya, 134 Cal. 531, 538 [66 Pac. 794]; People v. Sehorn, 116 Cal. 503, 510 [48 Pac. 495]; People v. Cramley, 23 Cal. App. 340 [138 Pac. 123]; 22 C. J. 633.)

The next contention of the defendant relates to the cross-examination of Detective Lieutenant Sanderson, who was called as a witness for the defendant. Lieutenant Sanderson testified that he saw the defendant in the constable’s office in Inglewood on the afternoon of July 4th; that he then questioned him and Dyer denied knowing anything about the disappearance of the children. On cross-examination the officer was asked to state the entire conversation which he had with the defendant at that time. The defendant’s objection to this question was overruled and the witness thereupon stated the conversation in detail. A similar ruling was made in connection with the cross-examination of the same witness concerning a conversation he had with the defendant at the Hall of Justice later the same day. In response to questions asked by defendant’s counsel upon direct examination, the witness was asked when Dyer first stated to him that he had any part in the taking of the children. Lieutenant Sander-son replied that this was about 8 o’clock. Upon cross-examination he was asked to state the conversation in which Dyer admitted his guilt. The defendant’s objection to this question was also overruled and the witness was permitted to answer.

The defendant contends that these rulings were erroneous and inconsistent with that made upon the cross-examination of the district attorney. However, the district attorney did not testify as to what had occurred on the previous day when the witness was interrogated. The conversation with the defendant to which he testified included his statement to Dyer that on the previous day Dyer had confessed. This was not testimony of the witness that Dyer had made such statement. But Lieutenant Sanderson was asked on direct examination about two conversations he had with the defendant. Having-testified to the substance of the two conversations in reply to these questions, it was proper for the district attorney to ask him on cross-examination to relate the conversations in detail. (See. 2048, Code Civ. Proc.; People v. Vukich, 201 Cal. 290 [257 Pac. 46].)

The defendant complains that the examination of Dr. Glenn Myers, medical witness called by him as an expert, was unduly limited; also, that in rebuttal Dr. De River, a physician who testified on behalf of the prosecution, was allowed to relate, over the defendant’s objection, a statement which he said the defendant had made to him about his sex life. Another point urged by the defendant is that the trial judge improperly overruled his objection to another question put by the prosecution to Dr. De River. These rulings, viewed from a theoretical standpoint are open to question. But in view of the repeated confessions of the defendant and the corroboration by physical and other evidence of the acts related by him, he was not prejudiced thereby. The entire record clearly shows that there has been no miscarriage of justice; hence the challenged rulings are not a ground for reversal. (Art. VI, sec. 4%, Const.)

The appellant also claims that the court erred in allowing the prosecution to introduce testimony respecting the time ihtook two police officers and two little girls, whose ages were approximately the same as the ages of the three children who were murdered, to walk from the park to the place where the crime was committed. The officers testified that they followed the same route described by the defendant in his confession. This was evidence in the nature of an experiment. The ages and comparative sizes of the children were practically the same as those of the murdered children. The same route was followed in the same weather. Conceding that there would probably be some difference between the time taken by the defendant and the three children he enticed from the park to walk to the scene of the crime and that which elapsed when the police officers took two other children over the same route, this was a matter for the consideration of the jury. The defendant might well argue to the jury upon the weight which they should give to such evidence, but it was clearly admissible. (People v. Halbert, 78 Cal. App. 598 [248 Pac. 969].)

Finally, the defendant contends the trial judge erred in admitting into evidence the confessions of the defendant because they contain so many discrepancies as to wholly discredit their verity. There are a number of inconsistencies in the details of the events related by the defendant on different occasions, but he repeatedly stated that he murdered the children. One cannot read the complete statements which the defendant made without reaching the certain conclusion that the evidence overwhelmingly supports the jury’s verdicts.

The judgments are, and each of them is, affirmed.

Curtis, J., Waste, O. J., Seawell. J., and Langdon, J., concurred.

Houser, J., concurred in the judgment.


text:
    [S. F. No. 15937.
    In Bank.
    May 27, 1938.]
    HAROLD WACHS, Appellant, v. LIONEL WACHS, Respondent.

      Fitzgerald, Abbott & Beardsley for Appellant.
    McKee, Tasheira & Wahrhaftig for Respondent.
   THE COURT.

A hearing of the instant appeal by this court after decision thereon by the District Court of Appeal has resulted in the conclusion that the decision that was rendered by the latter court is correct. The opinion therein, which was prepared by Mr. Justice Spence, is therefore adopted as the opinion of this court. It is as follows:

“Plaintiff brought this action upon a contract seeking to recover a share of certain commissions claimed to be due him under the terms of said contract: From a judgment in favor of defendant, plaintiff appeals.
“For approximately ten years prior to October 1, 1931, plaintiff and defendant had engaged in the real estate business as copartners under the name of ‘Wachs Bros.’. A dissolution agreement was entered into as of that date. There was a paragraph in said agreement entitled ‘Good Will’ which read in part as follows:
“ ‘It is contended by Harold Wachs that there is a good will which appertains to the partnership and that upon the dissolution thereof compensation should be made to Harold Wachs by Lionel Wachs. Attached hereto is a list called schedule 10 of the persons Avith whom Wachs Bros, have been in contact during the life of the partnership and to whom maps, letters and other literature have been sent. . . . Lionel Wachs hereby agrees to pay to Harold Wachs out of the commissions earned from any transactions consummated on or before October 1, 1934, a sum not to exceed $2,500, which sum shall be payable.as follows: When any transaction leading to a commission is closed as to any persons on said Schedule 10 . . . Lionel Wachs agrees to pay 25% thereof to Harold Wachs, within thirty days after the receipt thereof, until the sum of $2,500 has been paid. ’
“In his complaint, plaintiff alleged among other things ‘That the persons listed on said Schedule 10, by reason of their ownership of property, or interests in property, or their contacts with owners of property, or owner of interest in property, were persons with or through whom future patronage was-anticipated by said partnership ’. These allegations of the complaint were stricken out upon motion of defendant.
“On the trial plaintiff made an offer of proof to which an objection was sustained by the trial court. It appeared that approximately 200 persons were named on said schedule 10. It was stated in the contract that said schedule contained a list of ‘the persons with whom Wachs Bros, have been in contact during the life of the partnership’. (Italics ours.) (A perusal of the list shows that, with four or five exceptions, it was made up entirely of the names of natural persons rather than of corporations of partnerships. The addresses of said persons were listed, which addresses in numerous eases were listed as in care of some bank, investment company, chain store corporation or other commercial institution. These companies were not otherwise listed on said schedule 10. Plaintiff’s offer was made in great detail but it may be briefly summarized. He offered to prove that approximately 50 persons named on said list were either officers, agents or employees of certain principals such as banks, investment companies, chain store corporations or other commercial institutions, and that said persons had acted for and on behalf of their respective principals in dealing with the partnership as real estate brokers prior to the dissolution; that the partnership had never had any transactions with said 50 persons in their individual capacities but had had numerous transactions with them in their respective representative capacities, which transactions had resulted in the payment of commissions to the partnership. It was stated that said offer of proof was made to show the capacities in which said persons had acted in dealing with partnership prior to its dissolution and to place before the trial court the circumstances surrounding the making of the contract in order to enable the trial court to determine the meaning of the words ‘When any transaction leading to a commission is closed as to any persons on said Schedule 10’ as used in said contract. It was stipulated by the parties tha.t after the dissolution and between October 1, 1931, and October 1, 1934, transactions were had with certain persons named in said offer of proof and in said schedule 10 in their representative capacities and on behalf of their said principals, and that said transactions resulted in net commissions paid to defendant Lionel Wachs in a sum in excess of $8,000. This action was brought to recover a portion of said last-mentioned commissions.
“Appellant contends that the trial court erred in granting the motion to strike and in sustaining the objection to the offer of proof and therefore the judgment should be reversed. In our opinion this contention must be sustained.

“ The parties agree upon the general principles of law applicable in determining the admissibility of parol evidence in connection with written contracts but they disagree upon the question of whether such evidence was admissible here. It is conceded that the question involved is whether the language ‘When any transaction leading to a commission is closed as to any person on said Schedule 10’, as used in said contract, is clear and explicit or whether said language involves such an uncertainty as to permit the introduction of parol evidence in aid of the interpretation thereof. It is further conceded that ‘the question whether an uncertainty or ambiguity exists is one of law, and the lower court’s finding on this issue is not binding on appeal’. (Brant v. California Dairies, Inc., 4 Cal. (2d) 128, 133 [48 Pac. (2d) 13].) We are of the opinion that owing to the various senses in which the word ‘transaction’ may be used, such an uncertainty existed in the language employed in the contract here as to permit the introduction of the parol evidence offered.

“The word ‘transaction’ may imply something more than sale, lease or contract as used in the contract before us. It has been stated that said word embraces within its meaning ‘the doing or performing of any business’ (Bouvier’s Law Dictionary); ‘negotiation’ (United States v. Pan American Petroleum Co., 55 Fed. (2d) 753); ‘negotiations affecting property rights, contracts, agreements, and the negotiations resulting in contracts and agreements and in the transfer of titles’. (Tanner v. State, 161 Ga. 193 [130 S. E. 64].) Other definitions may be found in the authorities of which we need cite but a few. (Stephens v. Short, 41 Wyo. 324 [285 Pac. 797]; Bright v. Virginia etc. Co., 270 Fed. 410; Southeastern Life Ins. Co. v. Palmer, 120 S. C. 490 [113 S. E. 310]; Wilson v. Wilson, 83 Neb. 562 [120 N. W. 147].) Perhaps the word ‘transaction’ is such a word as was in the mind of Mr. Justice Holmes when he said, ‘A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used. ’ (Towne v. Eisner, 245 U. S. 418, 425 [38 Sup. Ct. 158, 62 L. Ed. 372, L. R. A. 1918D, 254].)

“What then is the meaning, or the ‘color and content’, of the word ‘-transaction’ as used in the contract before us? Should the phrase in question be interpreted to mean ‘when any sale, lease or contract leading to a commission is closed as to any person on said Schedule 10’ or should it be interpreted to mean ‘when any negotiation (doing of any business) leading to a commission is closed as to any person on said schedule 10. ’ If the first suggested meaning be given to the word ‘transaction’, then perhaps, the language should be restricted to those cases in which sales, leases or contracts leading to commissions were closed as to the persons named on schedule 10 as principals. If the second suggested meaning be given, then the language is broad enough to include those cases in which the negotiations leading to a commission were closed as to the persons on said schedule 10 either as principals or as representatives of others. It cannot be said from a reading of the contract whether the word ‘transaction’ was intended to convey the first or second meaning above suggested. It is one of those contracts where the words ‘consistently admit of two interpretations, according to the subject matter in contemplation of the parties’ and in which ‘parol evidence might be admitted to show the circumstances under which the contract was made and the subject matter to which the parties referred’. (Jenny Lind Co. v. Bower 6 Co., 11 Cal. 194, 198; see, also, McNeny v. Touchstone, 7 Cal. (2d) 429 [60 Pac. (2d) 986]; Civ. Code, sec. 1647; Code Civ. Proc., sec. 1860.) The trial court should therefore have permitted appellant to plead and prove the surrounding circumstances, not for the purpose of varying the terms of the written instrument, but for the purpose of aiding the court in interpreting the contract of the parties as embodied in the written instrument.”

The judgment is reversed.