text:
    [L. A. No. 16559.
    In Bank.
    April 15, 1938.]
    SAMUEL S. GELBERG, Petitioner, v. THE STATE BAR OF CALIFORNIA, Respondent.
    Jerry Giesler and S. Ward Sullivan for Petitioner.
    Philbriek McCoy for Respondent.
   THE COURT.

This is a proceeding to review a recommendation of the Board of Governors of The State Bar that petitioner, Samuel S. Gelberg, be suspended from the practice of the law for a period of one year. The board of governors by a unanimous vote adopted the findings of fact made by the local committee which heard the charges against petitioner, but by a divided vote rejected the recommendation of the local committee that he be given only a public reprimand. The petitioner prays this court to adopt the recommendation of the local committee. He does not deny that he was guilty of negligence in the conduct of his practice, as found by the committee.

The local committee found that petitioner had been “guilty of negligence in overlooking and overseeing his office, permitting a system of nonproperty owning employees to sign bonds of various kinds as an incident of and as a part of their employment without any recognition or knowledge on their part of what they were doing and without any expectation on their part to be bound”. The committee further found that investigation by the respondent of the course of conduct in his office would quickly have disclosed this practice, and proper supervision would have prevented it. In support of his plea that a public reprimand is the appropriate penalty, petitioner points to the fact that the local committee did not find that he had actual knowledge that his employees who were signing bonds did not own property.

The order to show cause listed ten bonds filed in eight different actions in which petitioner was the attorney of record. These bonds were filed between September 30, 1935, and September 8, 1936. Bight of the bonds were attachment bonds. The remaining two were filed pursuant to section 689 of the Code of Civil Procedure, which provides that property upon which execution has been levied shall be released where a third party claim is asserted unless an undertaking is filed. The bonds were respectively in the following amounts: $50, $216, $261, $301.24, $320, $500, $825, $1,000, $5,000 and $30,000. All except the bonds for $5,000 and $30,000 were filed in the Municipal Court of Los Angeles. The bond for $30,000, filed in the superior court, was inadvertently drawn in that amount, instead of for $3,000.

Petitioner had a large practice in the collection of accounts for clients. The actions in which the bonds were filed were all brought in the name of M. Moser, an employee of petitioner, as assignee for collection. The employees of petitioner who signed bonds were Dora Wallin, Eleanor Morales, Jerry Greenfield and Marie Moser. In two instances Marie Moser signed attachment undertakings both as principal and surety. These several employees were all young women vTho did clerical work in petitioner’s office at salaries of between $45 and $60 a month. Eleanor Morales was a minor and under the age of eighteen years when she signed bonds as a surety.

Petitioner cannot contend that he was not aware of the practice of having employees in his office sign bonds, since he himself testified that this practice was inaugurated in 1927 when he employed an attorney to organize his law office. Petitioner was admitted to practice in New York in 1916. He was admitted in this state in 1925. As his practice grew in this state, he felt the need of assistance of a person who was familiar with the organization of large law offices, and hence acquired the services of an attorney who, according to petitioner, started the practice of having employees sign as sureties on bonds in municipal court actions. He testified that said attorney told him such practice was usual in this state. The extent to which petitioner may claim ignorance of the practice in his office in regard to bonds is that he did not know that employees who were signing as sureties did not own sufficient property to qualify them.

Petitioner testified that the portion of his legal business which involved the collection of accounts, and which he described as the commercial or collection department, was not under his personal supervision. Except for the period between February and October, 1936, he employed one or two attorneys. His wife and a Mrs. Baker, who were not attorneys, also worked in a supervisory capacity in said department. Petitioner had a large bankruptcy practice to which he devoted his personal attention. However, five of the ten bonds referred to in the order to show cause were filed during the period when no other attorney was connected with petitioner’s office, and when, according to petitioner’s testimony, he had “very little” general practice by reason of economic conditions.

The young girls who signed the bonds testified that no inquiry had ever been made of them as to whether they owned property. They signed the bonds and the affidavits to the effect that they were worth the penal sum of the bond over and above all just debts and liabilities, exclusive of property exempt from execution, without realizing fully the nature of the instruments they signed. Eleanor Morales customarily made up the bonds by filling in blank spaces on forms, and brought them to the other girls to sign as sureties. This practice of Miss Morales had developed as a result of instructions given her by persons in a supervisory position in the office. Miss Morales then took the bonds to Mrs. Baker, who as a notary signed the jurat to the affidavit of the sureties. All the young women who acted as sureties testified that petitioner had never asked them to sign a bond, nor discussed the matter with them.

In October, 1936, a complaint was made to The State Bar by one Rushton. Mr. Rushton was the third party claimant to property upon which execution had been levied to satisfy a municipal court judgment for $300 rendered in favor of M. Moser against one Stadden. To prevent the release of this property to the third party claimant, the judgment creditor filed an undertaking in the sum of $50, upon which E. Morales and D. Wallin were sureties. Rushton excepted to the sufficiency of the sureties. The judge of the municipal court in which the action was tried testified upon the hearing before the local committee, and said committee found, that he justified the sureties upon the assumption that petitioner, as their employer, would be responsible upon said bond in case of any claim thereon.

Thereafter it was determined that Rushton had title to the property and an order was made for its return to him. On July 28,1936, Rushton secured a judgment in the small claims court against Moser, Morales and Wallin in the sum of $50, as damages sustained by him by reason of the taking of his property. After a failure to pay the judgment on Rushton’s demand, he called at the office of The State Bar in October, 1936. On November 12, 1936, petitioner was advised by The State Bar that complaint had been made against him. During the month of December petitioner was authorized by his client on whose behalf the action had been brought in the name of Moser to pay the small claims’ court judgment from funds of the client which petitioner had on hand. He did not pay Rushton this amount until February 2, 1937, almost a month after the preliminary hearing and after the local committee had issued an order to show cause. Rushton testified that Miss Wallin offered on the telephone to settle his claim for $10.

Petitioner admits his culpability in permitting his law office to be conducted in such a manner that his employees who did not own property were regularly acting as sureties on bonds. In explaining his lack of closer supervisión he points to his large practice and the fact, as testified by him, that he devoted himself largely to other phases of his legal practice. However, five of the ten bonds were filed during the period when no other attorney was connected with petitioner's office, and when, according to his own testimony, he had very little general practice.

The proceedings in connection with Rushton's third party claim must have forcibly drawn to petitioner’s attention the fact that young women in his office, who were receiving salaries of not more than $60 a month, were signing bonds as sureties. Petitioner’s explanation of this matter is that he told the judge that he owed the girls more than the amount of the bond ($50) at that time. He was concerned only with $50, and the thought of their being worth in excess of $50 did not come into his mind.

Miss Esty, the attorney representing Rushton, testified that she asked petitioner for a list of the properties upon which Miss llórales and Miss Wallin had justified as sureties. One of said sureties opened her purse and took out a check for $50. Miss Esty testified that petitioner waved this check in her face and asked her if that didn’t look as if the surety had sufficient property to pay a $50 judgment. Petitioner also made the following statement before the local committee: “I talked to other people in the office about the general worth of my employees and received the information that they were worth . . . that they were saving their money and were worth money.” Mrs. Gelberg testified that it was her belief when the bonds were signed, and she still continued in the belief, that any one of the girls was worth $500 by reason of being permanently employed.

It also appears that in October, 1935, exception had been taken to the sureties on a bond filed in another ease to prevent release of property upon a third party claim. Petitioner testified that he discussed the matter with the attorney on the other side in said case, and that the third party claim was withdrawn pursuant to stipulation.

On September 25,1936, Miss Morales and Miss Wallin were examined as to the property owned by them in a supplementary proceeding initiated by Rushton after the entry of the judgment against them in the small claims court for $50. Petitioner has devoted several pages in his brief to the proposition that he first had knowledge on September 25, 1936, that employees in his office who were not able to justify as sureties were signing bonds.

We are of the view that petitioner cannot in good faith claim that his ignorance of the financial irresponsibility of his employees to act as sureties continued to that late date. Any inquiry at all of said employees when Rushton excepted to their sufficiency as sureties would have revealed their disqualification, and this in turn should have served notice on petitioner as to the dangerous practices in vogue in his office in regard to bonds. Instead, three more bonds were filed in the amounts of $825, $216 and $30,000, with nonproperty owning employees as sureties. In view of the Rushton proceedings, petitioner’s neglect is of such character as to constitute a wanton indifference to existing material facts which would have been revealed by the slightest effort on his part.

After Rushton had secured the judgment in the sum of $50 against petitioner’s employees on July 28, 1936, on account of the wrongful taking of Rushton’s property, petitioner did not pay said judgment. Indeed, one of the surety-employees made an effort to settle Rushton’s claim by the payment of ten dollars. In December, 1936, petitioner was authorized by his client on whose behalf he had procured the judgment upon which execution was levied, to apply said funds of said client to the satisfaction of Rushton’s judgment, but petitioner delayed in making this payment until February 2, 1937, almost a month after the local committee had issued its order to show cause against him.

In the circumstances we are of the view that suspension for a period of one year, as recommended by the Board of Governors of The State Bar is not, as petitioner urges, so excessive as to call for a modification. It is therefore the order of this court that, pursuant to the findings and recommendation of said board of governors, petitioner be and he hereby is suspended from the practice of the law in this state for a period of one year, effective thirty days after the filing of this order.


source: Caselaw Access Project

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

license: Public Domain

text:
    [Crim. No. 4125.
    In Bank.
    April 19, 1938.]
    THE PEOPLE, Respondent, v. DAVE ROSEN, Appellant.

      A. H. McConnell for Appellant.
    U. S. Webb, Attorney-General, and Paul D. McCormick, Deputy Attorney-General, for Respondent.
   THE COURT.

The defendant was charged, by information with having committed the crime of robbery by feloniously'taking from one Paul W. Whitcomb the sum of $198, accomplished by means of force and fear. The defendant was also charged with having been armed at the time with a deadly weapon. He was tried on his plea of not guilty and convicted of robbery in the first degree. He appealed from the judgment of conviction and from the order denying his motion for a new trial.

This is a case where admittedly the defendant is guilty of the crime of assault with a deadly weapon. The question is whether he had the right to have the jury pass upon his defense interposed to the charge of the crime of robbery.

It is undisputed that the defendant, at about half-past eleven o’clock on the night of December 19, 1936, took the sum of $198 from a tin box kept in the rear room of Whit-comb’s clock shop in the basement of the Jergins building in Long Beach; that the defendant was then armed with a pistol, and that he accomplished his purpose by putting Whit-comb in fear. The grounds of the appeal are (1), that the court refused to admit evidence offered in support of the defense that the taking was under a bona fide claim that the property taken belonged to the defendant and that the felonious intent necessary to complete the crime of robbery was therefore lacking; (2) that the court refused to instruct the jury upon the theory and proffered evidence of such defense; and (3) that the court failed to instruct the jury on the law applicable to the crime of assault with a deadly weapon, such a crime having been established by undisputed evidence, including the admission of the defendant.

Across the hall from Whitcomb’s clock shop a place called "Miller’s Tango Parlor” was in operation. During several months prior to the date of the alleged offense the defendant had frequented Miller’s and during that period had lost in all about $1,000. He had played the game of ‘‘tango” at Miller’s on the night in question and lost about $55. The court refused to receive the defendant’s proffered testimony that the game of tango was a gambling or lottery game and illegal under the laws of this state. However, it appeared from the admitted evidence that in such a game the player purchased from the operator a number of cards at ten cents each, the price being collected before the commencement of the game. Cash prizes were paid to the holders of winning cards. Under the method of ‘ ‘ pay-off ’ ’ the holders of winning tickets were required to cash them by presenting them to Whitcomb, who deducted four per cent as a discount charge. Whitcomb moved back and forth between the parlor and his shop and carried money from the former to the latter, sometimes in loose bills and at other times in a tin box. He kept a separate fund in the box at his shop from which he paid the winners. It was from that box that the defendant took the sum of $198, which was its entire cash contents.

Upon his apprehension the defendant made a statement to one of the arresting officers that he had lost all he had at Miller’s; that he was merely going to get back his own money, and that he would have taken more had there been any more, because he had lost about $1,000 at Miller’s over a period of six months.

The Penal Code, section 211, defines robbery as the felonious taking of personal property in the possession of another, from his person or immediate presence, and against his will, accomplished by means of force or fear. Robbery perpetrated by being armed with a dangerous or deadly weapon is robbery in the first degree and is punishable by imprisonment in the state prison for not less than five years. (Secs. 211a and 213, Pen. Code.) Section 20 of the Penal Code provides that in every crime or public offense there must exist a union or joint operation of act and intent. This requirement of union of intent and act has led to the uniform rule in robbery cases that there can exist no felonious intent when the owner takes his own specific property from the possession of another, even though the taking is under such circumstances as would constitute robbery if the possessor were the owner thereof. (People v. Vice, 21 Cal. 344, 345; People v. Ammerman, 118 Cal. 23 [50 Pac. 15]; 22 Cal. Jur., p. 841; Johnson v. State, 24 Okl. Cr. 326 [218 Pac. 179]; People v. Hughes, 11 Utah, 100 [39 Pac. 492]; State v. Brill, 21 Idaho, 269 [121 Pac. 79]; Triplett v. Commonwealth, 122 Ky. 35 [91 S. W. 281]; Glenn v. State, 49 Tex. Crim. Rep. 349 [92 S. W. 806, 13 Ann. Cas. 774, 775], and eases cited in note; Temple v. State, 86 Tex. Crim. Rep. 219 [215 S. W. 965]; note, 135 Am. St. Rep., p. 485.) While there appears to be a conflict of authority on the question whether felonious intent is present when the defendant seeks the recaption of money lost by him at an illegal game (note, 135 Am. St. Rep., pp. 485-489), the weight of authority supports the conclusion that the intent to steal is lacking in such a case, for the law recognizes no title or right to possession in the winner. It is the law in this state that certain games of chance, such as lotteries, are illegal; that the winner gains no title to the property at stake nor any right to possession thereof; and that the participants have no standing in a court of law or equity. (Gridley v. Dorn, 57 Cal. 78 [40 Am. Rep. 110]; Bank of Orland v. Harlan, 188 Cal. 413, 421 [206 Pac. 75]; 16 Cal. Jur., p. 716.) In jurisdictions where such is the state of the law the weight of authority appears to favor the view that the recaption by force or fear of money lost at illegal games is not robbery, although the act may be punishable as an unlawful assault or trespass. (People v. Hughes, supra; Thompson v. Commonwealth, 13 Ky. Law Rep. 916 [18 S. W. 1022]; Sikes v. Commonwealth, 17 Ky. Law Rep. 1353 [34 S. W. 902]; Gant v. State, 115 Ga. 205 [41 S. E. 698]; State v. Price, 38 Idaho, 149 [219 Pac. 1049, 35 A. L. R. 1458], and note at p. 1461; notes, 57 L. R. A. 443; 13 Ann. Cas. 775; 21 Ann. Cas. 1139; 40 L. R. A. (N. S.) 805, 806.) The courts recognize that in such a case, whatever other element of crime may be present, there cannot exist an intent to steal or take feloniousty the property of another, which is an essential element of the crime of robbery. In People v. Hughes, supra, it was said: “In all criminal cases the question of intent is an important one. If this element is lacking, the general rule is that no offense has been committed. This rule is not only humane, but a contrary one would be opposed to all the principles which underlie human conduct as respects the bearing of individuals towards each other, and also as regards their position towards the state. And. so the law is that, when evil intent is lacking, the act or omission, which otherwise would constitute an offense, is robbed of its criminality. The rule governing this class of cases seems to be well settled and thoroughly defined. In a note in 70 Am. Dec. 188 (State v. McCune), where a number of authorities are collected, this proposition is laid down: ‘ When the prisoner takes the property under a bona fide impression that the property belongs to him, he commits no robbery, for there is no animus furandi’. . . . The defendant in all cases is entitled to have the law governing his case given to the jury for their guidance, and in this case the question of honest belief and bona fide intention should have been submitted to and passed upon by the jury under proper instructions.”

It has been suggested that the decisions which hold that felonious intent is lacking when the accused retakes money lost at illegal gambling, are based on statutory law which gives a right of action to the loser to recover the money lost. (Note, 42 A. L. R., p. 742.) The law of Texas and Michigan appears to be consistent with that theory. (Blain v. State, 34 Tex. Crim. Rep. 448 [31 S. W. 369]; People v. Henry, 202 Mich. 450 [168 N. W. 534].) The decisions in Texas holding that the act is robbery are based on the absence of any statute giving legal redress. In Michigan it is held that such retaking does not constitute robbery because the loser is entitled to recover in an action in assumpsit or replevin. That view, however, does not necessarily form the exclusive basis upon which a charge of robbery has failed. A further basis appears to be that, where the winner obtains no valid title or right to possession of the money won (State v. Price, supra; Thompson v. Commonwealth, supra), the loser cannot have a felonious intent in taking it. The view which seems to be consistent with the declared policy in this state is that the complaining witness, being in a sense in pari delicto with the accused, should not be heard in a court of justice on a charge of robbery against one whose only purpose was to retake money lost at an illegal game. This view neither condones nor invites the commission of crime, inasmuch as the accused must pay the penalty for the violation of any applicable penal law.

It has also been held that in resisting the charge of robbery by a showing that the intention was the recaption of money lost at an illegal game, it is not incumbent upon the defendant to prove that the money reclaimed was the identical money won from him. (Sikes v. Commonwealth, supra; Gant v. State, supra.) However, the accused must intend in good faith to retake his own property. The question of intent is one for the jury which may find, if the facts justify it, that the defendant’s expressed intent was a mere pretext resorted to as a cover for an intent to steal. (Crawford v. State, 90 Ga. 701 [17 S. E. 628, 629, 35 Am. St. Rep. 242].)

It follows that the trial court should have admitted evidence on the question of the legality of the game at which 'the defendant lost money, and should have given instructions requested by the defendant consistent with the views herein expressed. The jury should have been permitted to consider the question of the defendant’s intent as disclosed by all the evidence, including that offered and rejected. (People v. Keefer, 65 Cal. 232 [3 Pac. 818]; State v. Brown, 104 Mo. 365 [16 S. W. 406].) It was for the jury to determine whether Miller operated an illegal game at which the defendant lost sums of money; whether Whitcomb was the agent of the operator and handled the funds collected in the conduct of the game; whether the money taken by the defendant consisted of winnings from the parlor; whether the defendant’s expressed intent to get back his own money was bona fide or, because of remoteness from the time of loss or for any other reason, it was merely a pretext for an act of robbery.

The court did instruct the jury on the necessity of the union of act and felonious intent and in addition that “one cannot be guilty of robbery where the property taken belonged to him, even though the taking is accomplished by force or fear”. But the failure to instruct further on the theory of the defense that it was the defendant’s bona fide belief that the money was his own constituted prejudicial error on the record here presented.

The judgment and the order denying the motion for a new trial are and each is reversed.

SEAWELL, J., Dissenting.

I dissent. The law of this state shuts the door against those who voluntarily stake their money on gambling with cards and games commonly known as games of chance, whatever be the form or device used by the parties who mutually engage in gambling transactions. Courts will not act as referee as to the fairness of the methods of gaming or attempt to balance the bona fides of such unlawful ventures between parties who voluntarily stake their money or property on the hazard of chance, or as to wagers made by persons as to which one is the most skilful in the movements of the hands or other kinds of deception, whether the game is played with cards or by the manipulation of mechanical devices.

To hold that a loser gambling at games or wagering on the results of chance would be privileged to return to the gambling rooms where he had lost his stakes or recapture his losses at any place where he might meet the person he had gamed with, and, by force of arms, recoup his losses, would throw wide open the door to those criminally inclined to engage in robbery in its most dangerous form in the guise of recapturing stakes lost at some form of gambling or chance, without incurring the penalty prescribed for the offense of robbery. Such a defense could be made in every borderline case where the character of the transaction might be less marked than in the instant eases which bears some resemblance to a large number of nationwide transactions not infrequently referred to as gambling ventures. The recognition by law of the policy contended for would have the direct effect of menacing life by encouraging violence and breaches of the peace. It would offer a tempting subterfuge behind which gunmen would find convenient if not ample protection. The rule would open a new field for the operations of the criminal minded. We see no legal or moral strength on the side of appellant. He voluntarily parted with the possession of his money by matching his cunning with that of another. He lost and possession passed to the winner. He had no title which the law would protect. The law has no interest in the question of title as between the parties, but it does have an interest in the preservation of the life and limb of its citizens and in the maintenance of peace and order. That is its first duty. This being so, why, particularly where the actor, by his own folly, is responsible for the situation in which he has placed himself, should the law encourage or lend its approval to the commission of breaches of the peace ? If the law will not aid him in the recovery of that which he has voluntarily parted with, how can it be said that he has a legal right to rise above it and assume the role of an outlaw in recovering possession by force of arms ?

The cases in which a purse is snatched from the hands of a bystander and the victim makes a recovery of his specific property, or where a thief steals an animal and recovery is made by the owner from the pasture or possession of the thief, are not comparable with the situation presented by the instant ease. The distinction as to the means of possession is too apparent to require more than bare mention. In the first instance possession is gained by theft or by the exercise of fear or force. In the examples cited, the owner did not voluntarily part with possession; in the instant case, he did. This marks an important distinction in two widely different situations. Under the doctrine contended for, the loser at a game of chance, without regard to time or place, could continue his acts of prey under the sanctity of law and could appropriate unidentified moneys in which he has no title of sufficient stability to support his claim in an action at law until the last penny, with or without interest, has been made good.

There is no merit in the claim that this species of violence would have a tendency to suppress gambling. The laws which are designed to prohibit that evil, if properly enforced, are sufficient for that purpose. The nostrum administered to improve an unwholesome condition would have a more deleterious effect on the body politic than the evil which is remedial upon the enforcement of laws already written into our statutes.

The holding that stakes lost at the gambling table may at any time or place thereafter be retaken at the point of arms, thereby stripping an important section of the Penal Code of its deterrent force in such cases, portends the danger that such pronouncement will" tend to increase lawlessness by holding out hope of immunity to persons criminally disposed, and perchance act as an urge to others who, finding themselves driven to the brink of tragic depths by the disappointing turn of fortune, will be tempted to recoup such losses by embracing the desperate hazard of forcibly taking property from the person of another. If the loser in his attempt to take from the person whom be believes has in his possession money allegedly won from him—moneys, it may be, which are held in trust for another—and the latter resists the attempted search and seizure of his person which has all the appearances of an attempted robbery, and a homicide is thereby committed by one or the other—by no means a remote possibility—an interesting and vexatious question would arise as to the legal rights of either under the law of excusable or justifiable homicide.

In the confused situation in which the defense of person and property would be thrown by extending the rule as approved by the main opinion, it may be pertinent to ask what should be the measure or standard as to the quantum of force which either party may be entitled to exert in the struggle, first, with respect to the enforcement of the demands made by the known or disguised assailant, and, secondly, as to the resistance of an act which has every appearance of an ordinary robbery.

A voluntary participant in a game of chance has no title in or right of possession of personal property which the law recognizes after it has passed from the possession of one wagerer into the possession of the other. A creditor in legitimate business transactions is not given the privileges and immunities 'which the main opinion would bestow on persons who seek to recoup gambling losses.

I perceive no real reason or moral requirement for the adoption of a rule which will have the effect of throwing confusion into well-settled rights of person and property. In cases where it appears that there are mitigating circumstances which weigh in a defendant’s favor there is scarcely a doubt, under our humanized administration of the criminal lawr, but that the defendant would be released from a prison sentence by an order admitting him to probation, at the termination of which, if his conduct merits it, the entire proceeding is expunged from the court’s records. In addition, he has a right to apply to the executive head of state government for executive clemency, which is uniformly granted in proper cases.

I am of the view that the rule contended for by appellant w?ould prove to be inimical to the enforcement of law and the maintenance of order, and the doctrine which the main opinion approves would tend to enlarge the field of crime and incite disorder rather than restrict it.

Langdon, J., concurred.


author: SHENK, J.

text:
    [S. F. No. 15914.
    In Bank.
    April 19, 1938.]
    WESTERN LITHOGRAPH COMPANY (a Corporation), Petitioner, v. STATE BOARD OF EQUALIZATION et al., Respondents.

      Morrison, Hohfeld, Foerster, Shuman & Clark, Louis Ferrari and E. A. Miller for Petitioner.

      U. S. Webb, Attorney-General, H. H. Linney, Deputy Attorney-General, and James J. Arditto, Deputy Attorney-General, for Respondents.
   SHENK, J.

The petitioner Western Lithograph Company, filed with the State Board of Equalization a claim for refund of sales taxes imposed pursuant to the Retail Sales Tax Act (Stats. 1933, p. 2599, as amended Stats. 1935, pp. 1225,1252, 1256), amounting to $356.05 and theretofore paid by it. The claim was rejected and this proceeding was brought to compel the allowance and payment of the claim.

During the first quarter of 1937 the petitioner sold tangible personal property to Bank of America National Trust and Savings Association for use in this state at a total purchase price of $11,868.33. It included in its return for said quarter the gross amount received from the sales so made and payment of the three per cent computed thereon. The reason advanced by the petitioner for the allowance of the claim for refund is that the bank is an instrumentality of the United States government and is not subject to any tax by the state except in the manner prescribed by section 5219, Revised Statutes (12 U. S. Code, sec. 548), in conjunction with article XIII, section 6, of the Constitution of California and the Bank and Corporation Franchise Tax Act (Stats. 1929, p. 19, as amended), which do not permit the imposition on the bank of a tax such as contemplated by the Retail Sales Tax Act.

We may assume, for the purposes of this proceeding, that if the tax imposed pursuant to the provisions of the State Retail Sales Tax Act is a tax on the consumer or purchaser of the goods sold, then the petitioner is entitled to the relief sought.

It is further assumed that the bank, as a national bank, is an instrumentality of the United States, as contemplated by McCulloch v. Maryland, 4 Wheat. 316 [4 L. Ed. 579], and cases following it (see Davis v. Elmira 8av. Bank, 161 U. S. 275 [16 Sup. Ct. 502, 40 L. Ed. 700] ; First Nat. Bank v. Anderson, 269 U. S. 341, 347 [46 Sup. Ct. 135, 70 L. Ed. 295]; Iowa-Des Moines Bank v. Bennett, 284 U. S. 239, 244 [52 Sup. Ct. 133, 76 L. Ed. 265]), and as such is not subject to tax by the state except with the consent of and in the manner prescribed by congress.

The immunity of the state and federal governments from taxation of the one by the other was created out of the necessity for preserving the independence of the dual system of government under our constitutional system. As stated in Metcalf & Eddy v. Mitchell, 269 U. S. 514, at page 523 [46 Sup. Ct. 172, 70 L. Ed. 384], “Its origin was due to the essential requirement of our constitutional system that the federal government must exercise its authority within the territorial limits of the states, and it rests on the conviction that each government, in order that it may administer its affairs within its own sphere, must be left free from undue influence by the other”, citing among other cases, McCulloch v. Maryland, supra.

That this principle of immunity has its inherent limitations has also been recognized. (Helvering v. Powers, 293 U. S. 214, 225 [55 Sup. Ct. 171, 79 L. Ed. 291] and cases cited.) The decision in Davis v. Elmira Sav. Bank, supra, at page 283, indicated that the exercise of authority sought to be condemned or avoided must be one which “either frustrates the purpose of the national legislation or impairs the efficiency of these agencies of the federal government to discharge the duties, for the performance of which they were created”. And in Helvering v. Powers, supra (pp. 224-225), it was said: “But whether that field of activity, in relation to a state, carries immunity from federal taxation is a question which compels consideration of the nature of the activity, apart from the mere creation of offices for conducting it, and of the fundamental reason for denying federal authority to tax. That reason, as we have frequently said, is found in the necessary protection of the independence of the national and state governments within their respective spheres under our constitutional system. . . . The principle of immunity thus has inherent limitations. ’ ’

It was also said in Metcalf & Eddy v. Mitchell, supra, following the previous quotation herein from that case: “In a broad sense, the taxing poiver of either government, even when exercised in a manner admittedly necessary and proper, unavoidably has some effect upon the other. The burden of federal taxation necessarily sets an economic limit to the practical operation of the taxing power of the states, and vice versa. Taxation by either the state or the federal government affects in some measure the cost of operation of the other.

“But neither government may destroy the other nor curtail in any substantial manner the exercise of its powers. Hence the limitation upon the taxing power of each, so far as it affects the other, must receive a practical construction which permits both to function with the minimum of interference with the other; and that limitation cannot be so varied or extended as seriously to impair the taxing power of the government imposing the tax ... or the appropriate exercise of the functions of the government affected by it. ... ”

It was held in that case that a federal tax on the income of consulting engineers earned in part under contracts to furnish professional services to certain states and municipalities, was not such an interference. The court said (p. 524) : “But here the tax is imposed on the income of one who is neither an officer nor an employee of government and whose only relation to it is that of contract, under which there is an obligation to furnish service, for practical purposes not unlike a contract to sell and deliver a commodity. The tax is imposed without discrimination upon income whether derived from services rendered to the state or services rendered to private individuals. In such a situation it cannot be said that the tax is imposed upon an agency of government in any technical sense, and the tax itself cannot be deemed to be an interference with government, or an impairment of the efficiency of its agencies in any substantial way.” (Citing cases.)

The following language in the case of Willcuts v. Bunn, 282 U. S. 216, at page 225 [51 Sup. Ct. 125, 75 L. Ed. 304, 71 A. L. R. 1260], is also illustrative of the limitations of the principle: “The limitation of this principle to its appropriate application is also important to the successful working of our governmental system. The power to tax is no less essential than the power to borrow money, and, in preserving the latter, it is not necessary to cripple the former by extending the constitutional exemption from taxation to those subjects which fall within the general application of non-discriminatory laws, and where no direct burden is laid upon the governmental instrumentality, and there is only a remote, if any, influence upon the exercise of the functions of government.” Thus in Liggett & Myers Co. v. United States, 299 U. S. 383 [57 Sup. Ct. 239, 81 L. Ed . 294], it was held that a federal tax imposed on the manufacture of tobacco, although the duty of payment was postponed until removal or sale, created no direct burden upon the state, but that its effect was incidental, indirect and permissible within the doctrine approved by the cases cited by the court.

Having in mind the foregoing principle and its general limitations, we proceed to examine the provisions of the Retail Sales Tax Act. Section 3 of the act (Stats. 1935, p. 1252), provides: “For the privilege of selling tangible personal property at retail a tax is hereby imposed upon retailers at the rate of two and one-half per cent of the gross receipts of any such retailer from the sale of all tangible personal property sold at retail in this state on and after August 1, 1933; and at the rate of three per cent ... on and after July 1, 1935.” The term “gross receipts”, is defined (section 2 [7]), as the total amount of the sale price, with other inclusions not pertinent here; but also that “for the purpose of this act the total amount of the sale price above mentioned shall be deemed to be the amount received exclusive of the tax hereby imposed; provided, that the retailer shall establish to the satisfaction of the board that the tax imposed hereunder had been added to the sale price and not absorbed by the retailer. ’ ’

Section 8% (Stats. 1933, p. 2599) reads: “The tax hereby imposed shall be collected by the retailer from the consumer in so far as the same can be done. This section is hereby declared to be separable and distinct from all other portions of this act, and shall not be deemed a consideration or inducement for the enactment of the whole or any portion of this act. If this section be for any reason declared invalid, the remainder of this act shall remain in full force and effect and shall be as completely operative as though this section had not been included herein. ’ ’

Section 9 in its pertinent parts provides: 11 The tax levied hereunder shall be a direct obligation of the retailer and shall be due and payable in quarterly installments. . . . The board may by regulation provide that the amount collected by the retailer from the consumer, in reimbursement of taxes imposed by this act, shall be displayed separately from the list, advertised in the premises, marked, [market] or other price on the sales cheek or other proof of sale.”

Section 5 specifically exempts from the provisions of the act and from the computation of tax levied, assessed or payable, “the gross receipts from sales of tangible personal property which this state is prohibited from taxing under the Constitution or laws of the United States of America, or under the Constitution of this State”.

The petitioner places reliance on the last-quoted provision as authority or direction that the gross receipts from sales of tangible personal property to instrumentalities of the federal government are not to be included in the quarterly returns made by the taxpayer. This is true only if otherwise the tax must be deemed to be imposed on the federal instrumentality within the inhibition of the principle under consideration. It is not within the prescribed inhibition unless it is in fact a tax directly upon the government instrumentality, or, if not, its effect is nevertheless so direct as to constitute it a substantial as distinguished from an indirect and remote interference with the exercise of the govermental functions delegated to the federal instrumentalities.

The provisions of the act itself specifically are that the tax is laid upon and is a direct obligation of the retailer. Although the act furnishes the method by which the retailer may calculate reimbursement to himself by listing separately the amount of the tax from the sales price, nevertheless section 8and other provisions of the act specially negative any intent of the legislature that the tax should be considered as a tax on the consumer. In every case in which that question has arisen under the California Retail Sales Tax Act, the courts have uniformly and consistently recognized the legislative intent and adhered to the construction that the tax is upon the retailer and not upon the consumer. (Yosemite Park & Curry Co. v. Johnson, Sac. No. 5176, 10 Cal. (2d) 770 [76 Pac. (2d) 1191]; M. G. West Co. v. Johnson, 20 Cal. App. (2d) 95 [66 Pac. (2d) 1211]; Roth Drug, Inc., v. Johnson, 13 Cal. App. (2d) 720, 736 [57 Pac. (2d) 1022]; Graham Bros., Inc., v. Los Angeles, 6 Cal. App. (2d) 203 [44 Pac. (2d) 452]; People v. Herbert’s of Los Angeles, Inc., 3 Cal. App. (2d) 482 [39 Pac. (2d) 829]; Meyer Const. Co. v. Corbett, 7 Fed. Supp. 616.) Where the same question has arisen with reference to the administration and effect of similar provisions in the Motor Vehicle Fuel License Tax Act (Stats. 1923, p. 571, as amended), the same answer has uniformly been given. (Standard Oil Co. of California v. Johnson, Sac. Nos. 5144, 5145, 10 Cal. (2d) 758 [76 Pac. (2d) 1184]; People v. Ventura Refining Co., 204 Cal. 286, 294 [268 Pac. 347, 283 Pac. 60]; Rio Grande Oil Co. v. Los Angeles, 6 Cal. App. (2d) 200 [44 Pac. (2d) 451].)

The law contemplates the imposition of the fixed rate of the tax on the gross receipts, as defined by the act, and not on the individual sale of merchandise; and the provision for a bookkeeping method to compute the amount of the tax separately from the sales price does not alter this fact (Roth Drug, Inc., v. Johnson, supra, p. 738.) “That in ultimate effect the fund out of which payment [of the tax] is made may be or in fact has been obtained by the dealer from his customers does not make the tax a levy upon the consumer. ’ ’ (People v. Herbert’s of Los Angeles, Inc., supra.)

As noted in Meyer Construction Co. v. Corbett, supra, the act creates the relationship of sovereign power and taxpayer between the state and the retailer, and not between the state and the consumer. Therefore when the question has been whether the tax is collectible on receipts from sales to municipalities within the state for use in governmental functions it has been held that the retailer must pay the tax. (Rio Grande Oil Co. v. Los Angeles, supra; Graham Brothers v. Los Angeles, supra.)

In large part the controversy has resulted from the inclusion in the act of a specific method by which the retailer may calculate reimbursement of the tax from his customers. Had no such provision been made, but the tax had been imposed on the retailer at the specified rate on gross receipts from sales without more, the question would probably not have arisen, and the tax would have been considered a tax to be absorbed by the retailer and reflected in the higher prices of the commodities, just as any tax on property or business. In incorporating such provisions, however, the legislature plainly indicated its intent nevertheless to lay the tax solely on the retailer and to create the tax relationship between the latter only and the state. Furthermore, the provisions of the act, as indicated by the language quoted from section 2 (f), were undoubtedly designed to avoid the result in the case of Lash’s Products Co. v. United States, 278 U. S. 175 [49 Sup. Ct. 100, 73 L. Ed. 251]. There the act imposing ten per cent tax did not include a provision for separation of the price and tax, although the regulations and practice of the commission permitted it. The taxpayer contended that where the practice was not followed but nevertheless the sales price contained the amount of the tax he was liable only for the tax computed by first deducting the ten per cent from the sales price. The court expressed a doubt of the propriety of the commission’s practice under the provisions of the act, but held that in any event the taxpayer before the court must take the act as he found it and that his tax must be computed on the total amount actually received. The suggestion contained in the court’s statement, however, is obvious, namely: “Naturally a delicate treatment of a tax on sales might seek to avoid adding a tax on the amount of the tax. ’ ’ The effect of the provisions of the California Retail Sales Tax Act is to afford the opportunity for that treatment and nothing more. The method of listing the price and the tax separately and defining taxable gross receipts as the amount received less the amount of the tax added, merely avoids payment by the retailer of a tax on the amount of the tax. Under such provisions the effect stated in the case last cited still obtains, namely, that “the purchaser does not pay the tax. lie pays or may pay the seller more for the goods because of the seller’s obligation, but that is all,” and “the amount added because of the tax is paid to get the goods and for nothing else. Therefore it is part of the price. ...” The tax being a direct obligation of the retailer and, so far as the consumer is concerned, a part of the price paid for the goods and nothing else, it is neither in fact nor in effect laid upon the consumer. It does not become a tax on the sale nor because of the sale, but remains an excise tax for the privilege of conducting a retail business measured by the gross receipts from sales.

Unquestionably the act is non-discriminatory. It operates upon all alike in the same class, and does not result in exacting more from the federal instrumentality than is paid by other individuals. To conclude that the bank may come into the open market and purchase goods at a price less than other buyers merely by insisting that the amount of a non-discriminatory tax imposed upon sellers should first be deducted therefrom, is to accord to federal instrumentalities some favor or grace which is not necessarily within the contemplation of the principle of immunity here asserted. It cannot be said that the principle embraces the inherent right in either government to come into the open market and purchase goods at a lower price than paid by other consumers by clipping therefrom the equivalent of noil-discriminatory taxes validly imposed on the seller by the other government, and consequently reduce that government’s revenues to a proportionate extent. This view is in harmony with the cases hereinabove cited which recognize and define the inherent limitations of the doctrine of immunity, and follows the pronouncements of the Supreme Court of the United States in its more recent decisions formulating its conclusions on the applicability of the principle and its limitations in relation to other taxing statutes. (James v. Dravo Contracting Co., 302 U. S. 134 [58 Sup. Ct. 208, 82 L. Ed. 155, 114 A. L. R. 318]; followed in Silas Mason Co., Inc., v. Tax Commission of Washington, 302 U. S. 186 [58 Sup. Ct. 233, 82 L. Ed. 187], and Atkinson v. State Tax Commission of Oregon, (Jan. 31, 1938, No. 303 Oct. Term, 1937), 303 U. S. 20 [58 Sup. Ct. 419, 82 L. Ed. 621].)

We are aware that statements which might be said to support a contrary conclusion have been made in the cases of Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218 [48 Sup. Ct. 451, 72 L. Ed. 857, 56 A. L. R. 583] , Indian Motorcycle Co. v. United States, 283 U. S. 570 [51 Sup. Ct. 601, 75 L. Ed. 1277], and Graves v. Texas Co., 298 U. S. 393 [56 Sup. Ct. 818, 80 L. Ed. 1236]. Those cases involved respectively a law of Mississippi imposing an excise tax of one cent per gallon upon the sale of gasoline; a statute of Massachusetts levying an excise tax on sales; and a gasoline tax act of Alabama.

In the case of James v. Dravo Contracting Co., supra, the court had before it for consideration the Gross Sales and Income Tax Law of West Virginia, which provided for animal privilege taxes on account of “business and other activities.” That law imposed upon the contracting company a tax equal to two per cent of the gross income from its business. The imposition of the tax on income derived from a contract with the federal government, executed to further the construction of certain dams, raised the question whether the tax laid a direct burden upon the federal government. The holding was that the tax was not one on the government, its property or officers, nor was it upon an instrumentality of the government, or upon the contract. The court reiterated and redefined the limitations of the principle of immunity as stated in its former decisions. Although it said, “The application of the principle which denies validity to such a tax has required the observing of close distinctions in order to maintain the essential freedom of government in performing its functions, without unduly limiting the taxing power which is equally essential to both nation and state under our dual system,” it applied, as compelling a conclusion that the tax was valid, the limitation on the principle of immunity stated in Willcuts v. Bunn, supra, and hereinabove quoted. In the Dravo case the court also said: “But if it be assumed that the gross receipts tax may increase the cost to the government, that fact would not invalidate the tax. With respect to that effect, a tax on the contractor’s gross receipts would not differ from a tax on the contractor’s property and equipment necessarily used in the performance of the contract. Concededly, such a tax may validly be laid. Property taxes are naturally, as in this case, reckoned as a part of the expense of doing the work.” The court concluded that the tax provided by the West Virginia statute did not interfere in any substantial way with the performance of federal functions, and was a valid exaction. It expressly declined to consider whether the same result would follow from the application of the principles stated if commodities or goods were furnished rather than services. It refused expressly to overrule the cases of Panhandle Oil Co. v. Mississippi ex rel. Knox; Indian Motorcycle Co. v. United States, and Graves v. Texas Co., supra, but noted that in those eases the taxes were held to be invalid because laid on the sales to the respective governments, and further that theretofore those cases had been distinguished and must be deemed limited to their particular facts. Notwithstanding the holdings or expressions in the cases distinguished, it must here be concluded that a proper construction of the Retail Sales Tax Act of California is that the tax is not on the sale, but rather that it is a tax in the same category as property and excise taxes payable by an independent contractor engaged in the business of retail sales which, although they are reflected in the higher cost of the product or commodity offered, must be considered merely as a necessary expense of conducting the business. It is a tax computed on the gross receipts from the conduct of the business of the retail merchant. Essentially, as intimated in Metcalf & Eddy v. Mitchell, supra, there does not appear to be any sound basis for a distinction because the receipts affording the measure of the tax are derived from the retail business conducted by an independent contractor or merchant, rather than from the sale of services, where otherwise the imposition is non-discriminatory. Clearly the imposition of a privilege tax on the retailer of commodities does not interfere with the power of the government to borrow money; nor does it affect in any substantial manner the efficiency of its agency in the performance of its duties, nor the ability of the persons taxed to discharge their contractual obligations to the government, nor the ability of the government to procure the services of private individuals to aid them in their undertakings.

Following the path pointed by the court in the Dravo case, we conclude that the tax on the retailer under the Retail Sales Tax Act of this state imposed on the basis of a return which includes receipts derived from sales of tangible personal property to the bank, a federal instrumentality, does not unduly burden the federal government nor interfere with the exercise of the governmental functions delegated to its instrumentality, and was therefore validly imposed.

The petitioner relies with much confidence on the decision of the District Court of Appeal in M. G. West Co. v. Johnson, supra, decided in April, 1937, wherein it was held, among other things, that the tax imposed on the petitioner therein under similar facts was in substance a tax on the government instrumentality and as such was prohibited not only by the federal statute under which those agencies were incorporated but also by the doctrine of McCulloch v. Maryland, supra. It is true that a petition in the West Company case for a hearing in this court was denied. It also appears that the petition of the attorney-general for a writ of certiorari in the Supreme Court of the United States was denied on October 11, 1937, and that subsequent to the decision of the Supreme Court in the ease of James v. Dravo Contracting Co., supra, a petition for a rehearing in that court of its denial of a petition for certiorari in the West Company case was filed by the attorney-general and denied on February 7, 1938. It is likewise true that the denial of the petition for a hearing in this court after decision by the District Court of Appeal in the West Company case was not “an affirmative approval by this court of the propositions of law laid down in such opinion”. (People v. Davis, 147 Cal. 346, 350 [81 Pac. 718].) Nor does the denial of the writ of certiorari in the West Company ease by the Supreme Court of the United States require this court to follow the reasoning and conclusions of the District Court of Appeal. It is not to be supposed that the United States Supreme Court would recognize any necessity to assume jurisdiction of a controversy involving the validity of a state taxing statute which had been construed adversely to the state’s contentions in the state court. A thorough consideration of the questions involved in the case at bar has convinced us that the decision of the District Court of Appeal in the West Company case should not in any wise be deemed controlling in this proceeding. Application for a peremptory writ is denied and the alternative writ is discharged.

Curtis, J., Seawell, J., Waste, C. J., Nourse, J., pro tem., Houser, J., and Edmonds, J., concurred.

Rehearing denied.


author: EDMONDS, J.

text:
    [S. F. No. 15209.
    In Bank.
    April 19, 1938.]
    KARL HASSELL, Respondent, v. CITY AND COUNTY OF SAN FRANCISCO (a Municipal Corporation) et al., Appellants.

      John J. O’Toole, City Attorney, and Thomas P. Slevin, Deputy City Attorney, for Appellants.
    Reisner & Deming for Respondent.
   EDMONDS, J.

The City and County of San Francisco has been enjoined from constructing above the surface of the ground a public convenience station in Marina Park. The trial court, in effect, found that if the building were constructed in the manner proposed it would be a nuisance. This finding is challenged by the city, which contends that it is not supported by the evidence.

Marina Park is a strip of land about a block wide and five blocks long. It is bordered on the north by San Francisco Bay and on the south by Marina Boulevard, a public street. The respondent owns residential property of substantial value located on Marina Boulevard and almost directly opposite the site of the proposed building. The area has been zoned as a first-class residential district.

As planned by the city park commission of San Francisco the building would be 70 feet long, 18 feet wide, and would stand about 12 feet above the surface of the ground. Its position in the park would be wholly within the prolonged lines of Fillmore Street, which extends southerly from Marina Boulevard. The site chosen is approximately one hundred and twenty yards from the respondent’s property.

In determining whether a present or proposed use of property is a ’ nuisance, many factors must be considered. “The law relating to private nuisances is one of degree. A use that would be reasonable under one set of facts might be unreasonable under another.” (McIntosh v. Brimmer, 68 Cal. App. 770, 777 [230 Pac. 203], See note to Motoramp Garage Co. v. Tacoma, 42 A. L. R 891.) Although the extent to which the proposed building would be “indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property” (see. 3479, Civ. Code), cannot be definitely measured, a number of witnesses testified that the structure would substantially depreciate the value and desirability not only of plaintiff’s property, but also of all the property similarly situated along Marina Boulevard. As the only building along a narrow strip of parkway it would draw unusual attention, no matter how artistic its design and construction might be. It was further shown that unsanitary conditions usually prevail in such buildings, resulting in disagreeable odors which would sometimes blow across the park toward the respondent’s home. This evidence, considered as a whole, sufficiently shows that a building erected at the place and in the manner proposed would be a nuisance, and supports the finding of the trial court. Therefore, unless the appellant can show that in appraising the consequences which would result from the maintenance of the convenience station as it is now planned, the rights of the city have not been adequately considered and protected, the judgment should be affirmed. (Vowinckel v. N. Clark & Sons, 216 Cal. 156 [13 Pac. (2d) 733]; McIntosh v. Brimmer, supra.)

In this connection it should be noted that the city has not been enjoined from building a convenience station underground at the same location. Conceding, therefore, that one is needed at the location selected, it appears that the only question at issue is whether the city may build it according to present plans or must place the new facilities underground. The evidence shows that the additional cost of underground construction is not prohibitive and that this method has been adopted by the city in other parks. The judgment, therefore, gives the property owner the relief to which he is entitled, and allows the city to install its facilities under conditions consistent with the character and use of the surrounding property.

The charter of San Francisco grants to the park commission the exclusive control and management of parks, including the exclusive right “to erect and to superintend the erection of buildings”. (Sec. 41.) Appellant argues that the authority thus given is not subject to judicial interference or revision. However, it may not be exercised in such manner as to create a nuisance. (Lind v. City of San Luis Obispo, 109 Cal. 340 [42 Pac. 437]; Peterson v. City of Santa Rosa, 119 Cal. 387 [51 Pac. 557]; Adams v. City of Modesto, 131 Cal. 501 [63 Pac. 1083]; Humphrey v. Dunnells, 21 Cal. App. 312 [131 Pac. 761].)

Appellant also relies on section 3482 of the Civil Code, which provides: “Nothing which is done or maintained under the express authority of a statute can be deemed a nuisance. ’ ’ However, the authority for the construction of the new building is not express. (People v. Glenn-Colusa Irr. Dist.. 127 Cal. App. 30, 36 [15 Pac. (2d) 549]; People v. City of Reedley, 66 Cal. App. 409, 413 [226 Pac. 408].) “A statutory sanction cannot be pleaded in justification of acts which by the general rules of law constitute a nuisance, unless the acts complained of are authorized by the express terms of the statute under which the justification is made, or by the plainest and most necessary implication from the powers expressly conferred, so that it can be fairly stated that the legislature contemplated the doing of the very act which occasions the injury.” (46 Cor. Jur., p. 674.)

The judgment is affirmed.

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


author: SEAWELL, J.

text:
    [S. F. No. 15964.
    In Bank.
    April 19, 1938.]
    S. H. (SAMUEL HENRY) COWELL, Petitioner, v. THE INDUSTRIAL ACCIDENT COMMISSION, JOSEPHINE FIMBY et al., Respondents. I. M. (ISABELLA M.) COWELL, Petitioner, v. THE INDUSTRIAL ACCIDENT COMMISSION, JOSEPHINE FIMBY et al., Respondents.
    [S. F. No. 15965.
    In Bank.
    April 19, 1938.]

      George C. Faulkner, Henry G. Sanford and Faulkner, Doyle & Sanford for Petitioners.
    Everett A. Corten for Respondents.
   SEAWELL, J.

These two proceedings in certiorari, Nos. S. F. 15964 and S. F. 15965, were instituted by petitioners S. H. (Samuel Henry) Cowell and I. M. (Isabella M.) Cowell, respectively, to secure the annulment of findings and award made by the Industrial Accident Commission, imposing liability upon the Henry Cowell Lime and Cement Company, a corporation, and upon petitioners, as employers on May 15, 1934, of Samuel Fimby, a laborer who was injured while working upon the ‘ ‘ Carey Ranch ’ ’ at Davis, California. The contention of petitioners is that they were not the employers of said laborer, but that the corporation alone was his employer.

The Henry Cowell Lime and Cement Company, a corporation, is extensively engaged in the manufacture of lime and cement. Its principal plant is located at Santa Cruz, California. It has business offices in several of the principal cities of the state. The business of the manufacture of cement and lime has no kindred relation to the management or business of conducting the stock farm and ranch located at Davis, California. The plant of the corporation and business conducted in the manufacture and sale of lime and cement are situate in different counties and widely separated by distance from the Davis stock farm and ranch. It does not appear that as a business enterprise either was in any way related to or interdependent upon the other. Ordinarily no natural relation exists between the manufacture of lime and cement and the business of raising stock or conducting a farm.

Samuel Fimby was hired by the foreman of the ranch at Davis for a period of about three weeks to drive the team on the hayrake. On the evening of May 15, 1934, the second day of his employment, he was knocked down when one of the horses took fright as he was unhooking the team. He sustained a broken leg and minor lacerations. The leg injury caused a continuing disability, correction of which was attempted by surgical operation on August 18, 1936. He passed away during the operation. Three dependents survived him, his widow and minor sons, aged four and two years.

The foreman of the ranch immediately reported the injury to the Cowell corporation at San Francisco, and shortly after the injury the employee filed an application with the Industrial Accident Commission for adjustment of his claim to compensation. In this application he named the corporation as his employer. It appears that the ranch was operated by the corporation but it was owned jointly by Henry and Isabella Cowell (these petitioners), and by the estate of their deceased sister, Helen E. Cowell, which estate was then in course of probate. Petitioners, the estate, and one W. H. George, were the principal stockholders, in respective minority interests, of the corporation. Henry Cowell was also president of the corporation. W. H. George was its secretary. The corporation held a certificate of self-insurance. Petitioners, as individuals, were uninsured.

When the application for compensation first came on for hearing before the commission, W. H. George offered to stipulate that petitioners were the employers, and the commission thereupon ordered that they be joined as defendants in the proceeding. The proffered stipulation, however, was never accepted, and at a later hearing W. H. George moved, on behalf of petitioners, that it be withdrawn. He then further offered to stipulate that the corporation was the employer, and would assume liability. This latter stipulation was accepted by the employee’s counsel. It was followed by the entry, on February 28,1935, and on July 31, 1936, of findings and amended findings, which discharged petitioners but held the corporation liable as employer, and ordered payment to the employee over an indefinite period of temporary total disability benefits, and of medical expense. These payments were made by the corporation up to the death of the employee on August 18, 1936.

On September 3, 1936, Mrs. Josephine Fimby, the widow of the deceased, filed with the commission an application for death benefit, wherein she named the corporation as decedent’s employer. On September 28, 1936, the two minor sons of decedent, by their attorney, also filed an application for death benefit, but this application named as employer only petitioners Henry and Isabella Cowell, and not the corporation. The two applications came on for hearing on November 5, 1936. The commission ordered that petitioners be joined as parties defendant in the matter of the widow’s claim. Later it ordered that the two claims be consolidated, and that the estate of Helen E. Cowell be joined as party defendant therein. The hearing of the consolidated proceeding resulted in the entry on April 22, 1937, of findings and award in favor of the three applicants and against both the corporation and petitioners Henry and Isabella Cowell, no mention being made of the estate of Helen E. Cowell. A petition for rehearing by the commission was-denied.

Henry and Isabella Cowell thereafter instituted the two present respective separate proceedings for certiorari. They urge three main contentions: (1) That the evidence failed to support the finding that decedent was their employee; (2) That the award against them violates the principles of res judicata, estoppel, and law of the case; and (3) That the award is unreasonable.

The first contention cannot be sustained. The evidence established conclusively that petitioners, as well as the corporation, were employers of decedent. The ranch was owned jointly by petitioners and estate of Helen E. Cowell. As an accommodation to these joint owners, it was operated for them by the corporation. The corporation had the entire charge of the ranch. It kept a separate accounting of all ranch transactions. It sent checks to cover the ranch payroll. It sold all produce and cattle from the ranch in its own name. It made all purchases for ranch needs. It received no payment from the joint owners for these services. It paid over to the joint owners, the net profit realized from its management of the property. These facts were shown by the testimony of W. IT. George and by the records of the corporation. They were uncontradicted. Mr. George testified directly that the corporation “operated the ranch as an accommodation for I. M. and S. IT. Cowell”, and that it did not participate in the profits. In short, the evidence showed without conflict that the corporation operated the ranch as agent of the joint owners thereof. Under such circumstances, the commission properly held both the agent and its principals liable as employers for benefits due under the compensation act. (Act 4749, Deering’s Gen. Laws, vol. 2, p. 2272.) (Zurich General etc. Co. v. Division, etc., 99 Cal. App. 767 [279 Pac. 473]; Arbogast v. Richardson, 119 Cal. App. 316 [6 Pac. (2d) 98]; Schneider on Workmen’s Compensation Law, vol. 1, 2d ed., see. 22, p. 204.)

Petitioners’ argument is directed to the point that neither the fact that they were joint owners of the ranch property, nor the fact that they were minority stockholders of the corporation, conferred jurisdiction upon the commission to hold them as employers of those hired by the corporation to work on the ranch. And in this connection, petitioner Isabella Cowell contends that her case is even stronger than that of petitioner Henry Cowell, in that the evidence shows that she took no active part whatsoever in the operation or management of the ranch, whereas Henry Cowell had been president of the corporation for some twelve years, and admittedly in that capacity, if not as an individual, he had had a hand in the hiring of the ranch foreman, and in the direction of the ranch affairs. These additional facts are really immaterial, as petitioners were not found to he employers solely because they owned the ranch property, or because they were stockholders of the corporation, or on the theory that the corporation was their alter ego, or on any theory of “unity of interest”. It may be conceded that if the evidence had shown no more than that petitioners owned the property, and had leased or loaned it to the corporation for ranch purposes, said ownership of the property constituting petitioners’ only connection with or relation to the injured laborer, then the evidence would not have supported a finding that petitioners were employers. Neither would the evidence have justified such a finding if it had shown merely that petitioners, owned stock of the corporation which was operating the ranch, said ownership of stock and of property constituting petitioners’ sole connection with or relation to the injured laborer. The evidence here, however, showed a further direct connection between petitioners and the hiring of the injured employee. It showed that in fact petitioners not only owned •the ranch property, but they also owned the ranch as a whole, operated it for profit, and employed the labor thereon by and through their agent, the corporation. The additional circumstance that petitioners were at the same time stockholders of their corporate agent has no particular significance. The essential facts are these: The corporation did not conduct the ranch for its own gain. It did not intermingle the ranch affairs and funds with its corporate affairs and funds. It did not share in the ranch profit. It managed the ranch without compensation as an accommodation to the owners, and it paid the profits of the enterprise direct to petitioners. These facts established between petitioners and the injured employee the usual relation which exists where an undisclosed principal has employed help through his duly authorized agent. In such case both the undisclosed principal and the agent are employers. (Zurich General etc. Co. v. Division, etc., supra.)

The second contention of petitioners, urging application of the doctrines of res judicata, estoppel, or law of the case, is likewise without merit. It is true that the original findings and award made on February 28, 1935, dismissed and discharged petitioners; that thereafter a petition filed by the corporation for rehearing before the commission, and an application to the District Court of Appeal for writ of review, were both denied; that the further award of July 31, 1936, made during the lifetime of the employee, also discharged petitioners; that no petition was filed thereafter by the employee to reopen the proceeding for good cause, or to alter, amend, or rescind the findings and award; and that the later applications of the widow and children were filed as new and separate claims. The several proceedings, however, —those during the life of the employee and those had after his death—were all a part of the one cause of action arising from the compensable injury suffered by the employee.

The findings and awards made in favor of the employee were predicated upon his acceptance of the stipulation that the corporation was his employer and had assumed liability. At the hearings had prior to his death, the issue of whether petitioners as well as the corporation were employers, was dropped. So far as the present record shows, the issue was not raised thereafter by the corporation either by its petition for rehearing, or by its application for writ of review. Therefore the denial of writ of review did not establish the-law of the case on the question. Neither were the findings and awards made during the life of the employee res judicata upon the subject of petitioners’ status. This is so because the applications for death benefit made by the widow and children were filed well within the period during which the commission had continuing jurisdiction of the cause, to take further evidence or, upon due showing, to rescind, alter or amend prior findings and awards. The commission committed no impropriety and no act in excess of jurisdiction in entertaining the applications of the dependents, in rehearing the issues, and in rendering altered findings. To such procedure the doctrines of res judicata, and estoppel, are inapplicable. This is well settled. (Great W. P. Co, v. Industrial Acc. Com., 196 Cal. 593 [238 Pac. 662]; Bartlett Hayward Co. v. Industrial Acc. Com., 203 Cal. 522 [265 Pac. 195]; Winthrop v. Industrial Acc. Com., 220 Cal. 114 [29 Pac. (2d) 850]; Market St. Ry. Co. v. Industrial Acc. Com., 6 Cal. (2d) 344 [57 Pac. (2d) 499]; Employers’ Liability etc. Co. v. Industrial Acc. Com., 7 Cal. App. (2d) 190 [45 Pac. (2d) 371].)

Petitioners were not injured by the failure of the commission to order that the corporation be joined as a party defendant in the matter of the minors’ claim—an obvious oversight as the orders made by the commission plainly evidence its intention to consolidate the claims and to join all parties, i. e., petitioners, estate, and corporation, as defendants in the consolidated proceeding. The corporation, the only party which could have been injured by the omission, has never complained, but, on the contrary, it has hastened at every step of proceedings to assume liability, and to pay sums awarded as they fell due. This point can afford petitioners no relief.

The last contention of petitioners is that the award is unreasonable in at least two respects. First, petitioners complain that it fails to adjudicate the claim of the dependents against the estate of Helen E. Cowell, thereby depriving petitioners of their right of contribution from said estate. It will be noted that the commission, after joining the estate as a party defendant, neither discharged it, held it liable, nor mentioned it in the findings. The evidence showed the position of the estate to be identical with that of petitioners, and for that reason it should have been held as an employer. Petitioners, having a right of contribution from the estate, were entitled to complain of this error. (Hartford Acc. & Ind. Co. v. Industrial Acc. Com., 8 Cal. (2d) 589 [67 Pac. (2d) 105].) However, they failed to raise the question in their application for rehearing before the commission, and therefore they are precluded from now urging it in these certiorari proceedings. (See. 64c, Compensation Act, supra; County of Los Angeles v. Industrial Acc. Com., 109 Cal. App. 724 [293 Pac. 820]; Great Western Power Co. v. Industrial Acc. Com., supra.) The petition for rehearing did contain a general allegation that “the award is unreasonable”, but the argument in support of that allegation was not directed to the failure of the commission to find for or against the estate. The requirement of section 64c, supra, is that an application for rehearing shall set forth “in full detail” the grounds upon which an applicant considers an award unjust, and “every issue to be considered”, and that the applicant “shall be deemed to have finally waived all objections, irregularities and illegalities concerning the matter” not set forth in his application. By virtue of this provision petitioners must be deemed to have waived the contention.

The other respect in which petitioners contend that the award is unreasonable is that they claim it subjects them, as uninsured employers, to a possible civil action and imposition of penalties (sec. 29b of the act, supra)—and this despite the fact that the award is actually being paid, and the requirements of the act were substantially satisfied because payment of compensation to ranch labor was secured by the corporation’s certificate of self-insurance. This situation, of course, affords no sound basis for annulment of the findings and award. Indeed, it would have been more satisfactory for the determination of the dependents’ rights had a copy of the corporation’s application for self-insurance, and the certificate issued thereon, been made parts of the record. These documents would, or should, show definitely the business which the corporation was authorized to conduct by virtue of its self-insurance certificate. However, in our view we do not deem it necessary to remand the cause for the above omission.

The award is affirmed.

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


author: WASTE, C. J.

text:
    [L. A. No. 16412.
    In Bank.
    April 20, 1938.]
    In the Matter of the Estate of ROWZEE J. BOWER, Deceased. WALTER V. BOWER, Appellant, v. ANNA K. deBILLIER, Respondent.

      Perry Evans and Siemon & Claflin for Appellant.
    Claflin, Dorsey & Campbell for Respondent.
   WASTE, C. J.

This is an appeal from an order admitting a document to probate as the last will and testament of the decedent and appointing respondent administratrix with the will annexed. The document bears date of March 4, 1932, and purports to devise the decedent’s entire estate to respondent, a stranger to the blood. It was admitted to probate as an holographic will, the court below finding that it was “entirely written, dated and signed by the hand of the said decedent”. The contestant and appellant is a brother of the decedent who has contended at all times that the document is invalid as an holographic will because not entirely in the handwriting of the decedent. He claims as an heir at law and as a devisee under an earlier testamentary effort by the terms of which the decedent undertook to dispose of his estate in equal shares to his sister and two brothers. This earlier document was likewise found by the court below to be entirely written, dated and signed by the decedent but was denied probate because of the existence of the later and inconsistent document which, as stated, was found to be validly executed.

In order to facilitate our discussion of the issue whether the later document was properly admitted to probate as a validly executed holographic will we shall quote all of the reading matter appearing on the paper.. For purposes of clarity we italicize all portions that are in the handwriting of the decedent. All other portions are printed matter, common to a stationer’s form, and appeared upon the paper prior to the decedent’s effort to execute a will thereon. The paper reads:

Last Will and Testament
In the Name of God, Amen, I, B. J. Bower ...... of ........Bakersfield........ State of........ California ........of the age of .... 61 .... years, and being of sound and disposing mind and memory and not acting under duress, menace, fraud, or undue influence of any person whatever, do make, publish and declare this my last WILL AND TESTAMENT in the manner following, that is to say:
First: I give and bequeath all my Property of Every Kind and Description Whatsoever Whether Beal or Personal to Anna K. deBillier Secondly: B. J. Bower Mach fourth Ninteen hundred thirty two ”

The court below admitted to probate only the latter portion of the foregoing document, reading “I give and bequeath all my Property of Every Kind and Description Whatsoever Whether Real or Personal to Anna K. deBillier. R. J. Bower, Mach fourth Ninteen hundred thirty two,” on the ground that it was entirely written, dated and signed by the decedent as required by section 53 of the Probate Code. However, in so doing, it disregarded certain other portions of the document also in the handwriting of the decedent. This was error on the part of the court below. It is the function of the court to apply the pertinent rules of law to the entire instrument as executed by the decedent and not as deleted and reconstructed by the court. In Estate of Rand, 61 Cal. 468, 471 [44 Am. Rep. 555], wherein the blank spaces in a form will were filled by the decedent,'it was held that the instrument should be read and considered in its entirety in passing upon its validity.

To the same effect is the decision in In re Wolcott’s Estate, 54 Utah, 165 [180 Pac. 169, 170, 171, 4 A. L. R. 727], wherein the decedent likewise filled the blank spaces provided in a stationer’s form will and then in her own handwriting made several specific bequests. The proponent of the will offered for probate only such portions as were in the handwriting of the decedent. In rejecting this offer, the court declared that “If there are authorities sustaining the right of a party to offer for probate as a will such portions of a document as he may desire for the purpose of making a ease, while excluding other portions which would defeat his purpose, such authorities are not well considered, and we would hesitate to follow them. If the matter excluded from the offer was totally disconnected therefrom, was not germane, or was entirely irrelevant to the purpose and object of the instrument, a different question would be presented. Such matter might be treated as surplusage and disregarded. . . . The fact that the matter written by deceased in her own hand, standing alone, might constitute a complete testamentary disposition of her property, does not alter the case. The document offered by appellant is not the document prepared by deceased as her will. ’ ’

It is our duty, therefore, in determining the validity of the instrument here before us to consider all parts thereof that are in the handwriting of the decedent, whether or not indispensable thereto. Then, and only then, can the established rules of law be correctly applied to the document as a whole and an accurate conclusion reached as to its validity. This conclusion obviously requires us to take into account the words and figures “R. J. Bower”, “Bakersfield”, “California”, and “61”, appearing at the beginning thereof and inserted in the handwriting of the decedent in the blank spaces provided therefor in the printed form employed by the decedent. When all portions in the handwriting of the decedent are considered and the instrument is read as a whole, we are constrained to declare that it is not entirely written by the hand of the decedent and is therefore invalid as an holographic will. It always has been, and still is, the law of this state that an holographic will to be effective must be entirely written, dated and signed by the hand of the testator. (See former sec. 1277, Civ. Code; sec. 53, Prob. Code.) The authorities wherein this rule is discussed are legion. We need mention but two. In the Estate of Thorn, 183 Cal. 512 [192 Pac. 19], the instrument was declared invalid as an holographic will because of the presence in the body thereof of a rubber stamp impression of the name of the property or country place therein sought to be devised, and this despite the presence in the document of an additional and adequate description of the property in the handwriting of the decedent. Necessarily, it there had to be held that the presence in the body of the will of printed matter precluded the document from being entirely written by the hand of the testator.

In the Estate of Bernard, 197 Cal. 36 [239 Pac. 404], the document was written on hotel stationery and read as follows:

“The following 4 sheets of paper included, Long Beach, California, Oct. 12,1918. I, Josephine Bernard of the City and County of Denver, Colo, do hereby declare this to be my last will and testament. ’ ’

Then followed several dispositive provisions. All of the document but the italicized words “Long Beach, California” was in the handwriting of the decedent. The italicized words were printed on the paper. As one ground of the decision it was held that the instrument was not entirely written by the hand of the decedent. This was so, it was stated, because the decedent by writing in her own hand above the printed date line the words “The following 4 sheets of paper”, evidenced an intention that “The printed words [were] incorporated in and doubtless were intended to be made a part of the heading of the document”.

So it is in the present case. Consideration of all portions of the document here involved which are in the handwriting of the decedent, and particularly the written inserts in the blanks provided in the printed form, definitely indicate that the decedent intended to include and incorporate in his will the printed portions among which the written inserts appear. That this is so, may be demonstrated by one illustration. The figures “61” in the handwriting of the decedent are meaningless unless read in connection with the printed words “of the age of.... [61]... gears’’. True, such introductory written and printed matters are not essential to a testamentary document. But, the fact remains that the decedent herein concluded that they were indispensable to and should be a part of his will and he manifestly made them a part of his will. This is not the first instance wherein matter, unnecessary from a purely legal viewpoint, has made its way into the body of a document testamentary in character. As stated above, we are to read the decedent’s will as he wrote it and not as we would write it in order to cause it to comply with established legal principles. We therefore repeat that the document here before us is invalid because not entirely written by the hand of the testator as required by the provisions of section 53 of the Probate Code and the holdings in the Thorn and Bernard cases, supra.

In declaring the instrument invalid as an holographic will, we have not lost sight of the decisions in Estate of Oldham, 203 Cal. 618 [265 Pac. 183] and Estate of De Caccia, 205 Cal. 719 [273 Pac. 552, 61 A. L. R. 393], As we read the latter two cases, they hold that the mere presence of printed matter upon the paper does not vitiate an otherwise valid holographic will written entirely by the hand of the testator if such printed matter be not expressly or impliedly incorporated in the provisions which are in the handwriting of the decedent. Examination of the last two cited cases discloses that the extraneous matter involved consisted in one instance of a printed letter head and in the other of a line containing the printed words “Oakland, California” appearing at the top of one page of an unfolded double sheet of paper used by the testator. In each of these cases this court took occasion to point out that such printed matter was in no way incorporated in or made a part of the written instrument. In the Oldham case, supra, 620, 621, in discussing the effect of the printed letter head which merely disclosed the name and office location of the testator, this court declared that “we find no reference whatever to the printed words appearing upon stationery used by the deceased in the preparation of said instrument. These printed words are not expressly, by direct reference, or impliedly, by inference or otherwise, made a part of the written instrument set forth on the sheets of paper upon which they appear . . . The printed words appearing upon the three sheets of paper upon which the deceased attempted to write his will are wholly disconnected from the writing itself, and they form no part thereof. Our attention has not been called to any authority, nor are we aware of any such, which holds that the mere presence of printed words upon a sheet of paper, used by a person for the purpose of writing thereon a holographic will, renders the will invalid when such printed matter is no part of the writing, and is wholly dissociated therefrom.1 ’ The latter part of the foregoing quotation, and a reading of the case, definitely indicates that the court had clearly in mind, and indirectly, if not directly, approved the rule of the Thorn and Bernard eases, supra, which rule, we think, is controlling here.

In the Estate of De Caccia, supra, 724-726, wherein this court held that the printed words “Oakland, California”, appearing at the top of one page of an unfolded double sheet of paper used by the testator, did not invalidate the will there involved, it was stated that “The printed words are not preceded by any writing of the decedent in which a reference is made to said printed matter, as was found to be the case in Estate of Bernard, supra, indicating that it'was the intention of the testator to make them a part of the instrument. . . . Even if the testator intentionally wrote some part or the whole of the first line above the printed matter, but did not make any reference therein to the printed words, we hardly see how the mere fact of this relative position of the words in the instrument would indicate any intention to make the printed words a part of the will. . . . The fact, therefore, that a part of the first line, written by the deceased, was slightly above the printed words does not, in our opinion, show any intention to make the printed matter upon the paper a part of the document written thereon. . . . Nowhere in said instrument is there any reference made to the printed words upon the sheet of paper used by said decedent for the purpose of writing his will. The printed words are in no way essential to the validity of the instrument as a holographic will, and we are not to presume that the decedent made them a part of the instrument he executed without some evidence appearing upon the face of the instrument itself manifesting such an intention. The mere presence of printed matter upon stationery used by a person for the purpose of writing his holographic will which forms no part of the written instrument and to which no reference directly or indirectly is made in the written instrument, will not destroy the effect of such instrument as a holographic will.” (Italics ours.) Here, again, it may be said that the court had in mind the rule of the earlier cited cases to - the effect that printed matter appearing on the paper and which may reasonably be said to have been intended by the decedent to constitute a part of his attempted holographic will, destroys the validity of the same.

In the instant case, as already pointed out, the written words, at least indirectly, refer to and include in the will as written and executed by the decedent the printed matter appearing upon the form employed by the decedent. It appears obvious that the testator by inserting words in his own handwriting in the blank spaces appearing in the printed form intended that such written words should be read with and, where necessary, explained or given meaning by reference to the printed portions of the form. The document, as executed by the decedent, may not reasonably be read in any other light, respondent’s contention to the contrary notwithstanding. It clearly appears, therefore, from the face of the will itself that the printed matter was intended by the decedent to be incorporated in the will as executed by him. This, as already indicated, is fatal to its validity.

In passing, it should be stated, merely for purposes of clarity, that the Thorn and Bernard cases, supra, here relied on, are not in conflict with the later Oldham and De Caccia cases, supra. These two lines of cases apply to different factual situations and are consistent and distinguishable one from the other. The distinction is expressly recognized in the two later eases. Under the Thorn and Bernard cases, an holographic will is invalid if printed matter appearing on the paper is directly or indirectly incorporated or included in the provisions written by the hand of the decedent. Such, as we have shown, is the factual situation which confronts us in the present case. While under the later Oldham and De Caccia cases, the mere presence of printed matter on the paper is not fatal to the validity of an holographic will written thereon if such printed matter be not included or incorporated, directly or indirectly, in the will as written by the hand of the decedent.

In closing, it should be added that section 53 of the Probate Code, the counterpart of the former section 1277 of the Civil Code, offers no obstacle to the conclusion here announced. The cited code section merely has codified the rule of the De Caccia case, supra, by adding to the declaration that an holographic will is subject to no other form than that it be entirely written, dated and signed by the hand of the testator, an additional sentence to the effect that “No address, date or other matter written, printed or stamped upon the document, which is not incorporated in the provisions which are in the handivriting of the decedent, shall be considered as any part of the will.” That this sentence was added to the section to codify the rule announced in the De Caccia case, appears from the code commissioner’s statement to that effect appended by way of note to the section. Respondent concedes this to be so. But, as we have shown, the rule announced in the De Caccia case is not applicable to the factual situation here presented.

The order appealed from is reversed with directions to the court below to proceed as herein indicated.

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