author: CURTIS, J.

text:
    [S. F. No. 15873.
    In Bank.
    February 24, 1938.]
    JOHN RAGGIO, a Minor, etc., et al., Appellants, v. BARBARA MALLORY et al., Respondents.

      Martinelli & Gardner and Herbert Chamberlin for Appellants.
    J. Hampton Hoge and A. Dal Thomson for Respondents.
   CURTIS, J.

This is an appeal from a judgment against the plaintiffs in a personal injury action brought by the two plaintiffs, father and minor son, against the defendants. Defendant Barbara Mallory is a minor, and the two other defendants are her parents. The injuries were sustained by the minor plaintiff by being run over by an automobile driven by Barbara Mallory. The automobile was owned by her parents at the time of the accident, and they also had signed the application of Barbara Mallory to the state motor vehicle department for a driver’s license. In their appeal from the judgment against them, the plaintiffs contend that the evidence was insufficient, to support the verdict of the jury and the judgment based upon said verdict, and that the court erroneously instructed the jury.

The rule respecting the powers of an appellate court in reviewing the evidence on appeal from a judgment on the ground of the insufficiency of the evidence to support the judgment has been so often stated by this court that a repetition of said rule at this time would seem unnecessary. A recent statement of that rule by this court is reported in the case of Bellon v. Silver Gate Theatres, Inc., 4 Cal. (2d) 1, 13 [47 Pac. (2d) 462], It will suffice for the purpose of this appeal to merely repeat what is there said in reference to said rule. In that case the rule was stated in the following language: “In reviewing the evidence on such appeal all conflicts must be resolved in favor of the respondent, and all legitimate and reasonable inferences indulged in to uphold the verdict if possible. It is an elementary, but often overlooked principle of law, that when a verdict is attacked as being unsupported, the power of the appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted which will support the conclusion reached by the jury. When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court. ’ ’

With this rule to guide us, we will proceed to an examination of the record for the purpose of ascertaining whether there is any substantial evidence therein to support the judgment in this case. The accident happened on the Alto bridge in Marin County at about 4 o’clock in the afternoon of December 5, 1934. The plaintiff minor, 12 years of age Avith other boys of about his own age, was Avalking along said bridge Avhen an electric train passed under the bridge. The boys went to the side of the bridge to look at the train. John Baggio, the minor plaintiff, stepped upon the wooden curb or wheel guard which was constructed along the side of the bridge adjacent to the roadway over the bridge. It was about six inches high and the same in width. There was a railing along the side of the bridge something like three feet in height. John Baggio stood on this curb, leaned over the railing and watched a train passing under the bridge. Barbara Mallory with her mother was driving over the bridge. When they entered upon the bridge the speed of their machine was between 35 and 40 miles an hour. This speed was reduced to between 25 and 30 miles per hour immediately after they drove upon the bridge, and this speed was maintained up to the time of the accident. At a point 150 to 200 feet from the boys, the driver of the automobile saw the boys and at that time John Baggio was leaning over the railing evidently watching the train. When within 20 to 30 feet from him, the driver of the car sounded her horn two to four times. None of the boys gave any indication that he heard the horn, but one of them testified that he heard it: Just as the car arrived opposite John Baggio, he suddenly jumped back into the path of the ear and was run over and injured. Immediately before John jumped off the curb, he had been throwing littie clods of earth on the train. One of these clods of earth hit the train, and John jumped back, apparently to keep the conductor of the train from seeing him. The Alto bridge is 760 feet in length and the paved portion thereof is 21 feet in width with a white line down the center thereof. At and immediately prior to the accident, the machine operated by Barbara Mallory was being driven midway between this white, line and the six-inch curb along the north side of the bridge. Another car was approaching the scene of the accident from the opposite direction from which the Malloiy car was being driven at the time of the accident. The theory upon which the plaintiffs based their ease was that John was struck while standing on the six-inch curb and that he neither stepped down nor jumped from the curb immediately before being struck by the automobile. The verdict of the jury against plaintiffs has eliminated this evidence from our consideration. The contention of plaintiffs that the evidence fails in any substantial measure to support the judgment is predicated in the main upon the fact that John Baggio was a minor and due to that fact the conduct of Barbara Mallory in the operation of the car that ran over John Baggio shows that she ivas negligent and that the minor was free from any act of negligence which contributed to his injury.

The plaintiffs, who will be referred to hereafter as appellants based their contention that the judgment is lacking in evidentiary support upon the fact that John Baggio, the minor appellant, was at the time of the accident a boy of the age of 12 years only, and therefore a greater degree of care was required of the driver of the car in approaching the point on the bridge where he was standing than if he had been an adult, and that said minor on account of his age, and the circumstances under which he was injured, was not guilty of negligence.

If the driver of the Mallory machine was negligent in the operation of the car she was driving then the plaintiffs were entitled to recover unless the minor was guilty of contributory negligence which proximately caused his injuries. It is unnecessary to discuss the question as to whether the driver of the Mallory car ivas negligent, as we are convinced that the implied finding of the jury that the minor was guilty of negligence which was the proximate cause of his injury finds ample support in the evidence.

The irresistible conclusion that must be drawn from the evidence is that the sole cause of the minor’s injury was his sudden jumping backward just as the car arrived opposite the place where he was standing. There is no doubt that had John Baggio been a person of mature years he would have been held to be guilty of negligence. (Hatzakorzian v. Rucker-Fuller Desk Co., 197 Cal. 82, 95 [239 Pac. 709, 41 A. L. R. 1027].) He left a position of safety on the six-inch curb and without warning and without looking to see whether any vehicles were approaching, heedlessly stepped or jumped back into the path of the approaching car. The minor was then 12 years of age and of normal intelligence of a boy of that age. He lived in the vicinity in which the bridge was located. He knew it was a part of the main highway and was familiar with the automobile traffic passing over the bridge. Under these circumstances he was subject to the doctrine of contributory negligence. (Moeller v. Packard, 86 Cal. App. 459 [261 Pac. 315]; Richardson v. Ribosso, 120 Cal. App. 641 [8 Pac. (2d) 226]; Studer v. Southern Pac. Co., 121 Cal. 400 [53 Pac. 942, 66 Am. St. Rep. 39]; De Nardi V. Palanca, 120 Cal. App. 371 [8 Pac. (2d) 220]; Greeneich v. Knoll, 73 Cal. App. 1 [238 Pac. 163]; 2 Cal. Jur. Ten-year Supp., secs. 277, 278, pp. 441, 443, 445.)

In the case of Moeller v. Packard, supra, it was held that a girl eight and one-half years of age was guilty of contributory negligence in suddenly running in front of an automobile traveling upon the highway. In that case the court on page 467 of its opinion quoted with approval the following statement from Beach on Contributory Negligence: “ ‘It is a question of capacity and it has been found a very difficult question, and has been, in many cases, a very fruitful source of controversy as to what age is sufficient to constitute an infant sui juris. Unless the child is exceedingly young it is usually left to the jury to determine the measure of care required of the particular child in the actual circumstances of the case. Where there is no doubt as to the capacity of the child, at one extreme or the other, to avoid damage, the court will decide it as a matter of law.’ (Beach on Contributory Negligence, see. 117.) ”

In the case of Richardson v. Ribosso, supra, the injured minor was only seven years of age. He suddenly ran across the street upon which the defendant was traveling and ran into the automobile driven by the defendant in that action. He was held to be guilty of contributory negligence. In its opinion the court on page 643 states, “the total absence of care on the part of the minor is so apparent that the jury’s finding of contributory negligence on his part is alone sufficient to support the verdict. In this respect the case is controlled by Dullanty v. Smith, 203 Cal. 621, 627 [265 Pac. 814], and Moeller v. Packard, 86 Cal. App. 459, 464 [261 Pac. 315].”

Appellants rely upon Scandalis v. Jenny, 132 Cal. App. 307, 310 [22 Pac. (2d) 545], and Soda v. Marriott, 118 Cal. App. 635 [5 Pac. (2d) 675]. In the first of these two eases the injured minor was only three years of age and in the second he was four and one-half years of age. Evidently the same rules would not apply to an intelligent boy twelve years old as were applied to these children three and four and one-half years old respectively. The other eases cited by appellant are equally inapplicable to the facts in this case as the two just mentioned.

As the jury in the present case impliedly found that the injured minor was guilty of contributory negligence and therefore could not recover in this action and as there is substantial evidence in the record to sustain the verdict of the jury, the judgment based upon this verdict should not be disturbed on the ground of the insufficiency of the evidence to support it.

Appellants further contend that two instructions given by the trial court upon the respondents’ request were erroneous and that the giving of each of these instructions was prejudicial to the substantial rights of the appellants. In one of said instructions the jury was instructed on the doctrine of imminent peril. It is contended that there was no evidence in the case supporting this instruction. Conceding this to be so, the instruction related solely to the acts of the driver of the car and the claim of appellants that it was negligently operated. It was not in any way directed to the question of the contributory negligence of the minor appellant. The appellants were not therefore prejudiced by the giving of this instruction even if it was unsupported by the evidence.

The same may be said as to the other instruction which the appellants contend was prejudicially erroneous. In this instruction the jury was told that Barbara Mallory, the driver of the car, was presumed to have exercised ordinary care and obeyed the law immediately prior to and at the time of the accident. This instruction under a state of facts similar to that disclosed by the evidence in this ease has frequently been criticized by the courts of this state. (Paulsen v. McDuffie, 4 Cal. (2d) 111, 119 [47 Pac. (2d) 709]; Tyson v. Burton, 110 Cal. App. 428 [294 Pac. 750]; Mundy v. Marshall, 8 Cal. (2d) 294 [65 Pac. (2d) 65]; Kelly v. Fretz, 19 Cal. App. (2d) 356 [65 Pac. (2d) 914].) In the case of Tuttle v. Crawford, 8 Cal. (2d) 126 [63 Pac. (2d) 1128], the majority opinion holds that the giving of an instruction similar to the one here under discussion “worked no serious prejudice to the defendant, and we affirm the judgment”. In the dissenting opinion in that ease an opposite conclusion was reached. However, the instruction in the present case was proposed by the respondents in support of their contention that, they were not guilty of negligence. It was not directed to the acts of the minor and had no bearing whatever upon the claim that he was guilty of contributory negligence. Admitting that the giving of the instruction was erroneous, it cannot be held to have been prejudicial.

In our opinion the judgment is supported by the evidence, and the appellants were not prejudiced by the giving of the criticized instructions.

The judgment is affirmed.

Langdon, J., Edmonds, J., Shenk, J., Houser, J., and Nourse, J., pro tem., concurred.

Rehearing denied.


source: Caselaw Access Project

author: WASTE, C. J.

license: Public Domain

text:
    [S. F. No. 15928.
    In Bank.
    February 24, 1938.]
    JOHN A. LIVINGSTON, Petitioner, v. H. W. ROBINSON, as Treasurer, etc., et al., Respondents; J. R. MASON et al., Interveners.

      A. L. Cowell for Petitioner.
    C. F. Metteer, Orrick, Palmer & Dahlquist, W. H. Orrick, George Herrington, J. C. Peppin, Orrick, Dahlquist, Neff & Herrington for Respondents.
    W. Coburn Cook for Interveners.
    Treadwell & Laughlin, as Amici Curiae.

   WASTE, C. J.

In this proceeding in mandamus an alternative writ was issued. On the return thereof the controversy was submitted upon an agreed statement of facts.

The Nevada Irrigation District was organized in 1921 under the California Irrigation District Act. Its principal revenue was derived from the delivery of water to the Pacific Gas and Electric Company for power purposes, the water being later released below the power plants of the company for distribution to the landowners of the district for irrigation and other uses. Subsequent to its organization, the district issued bonds to the amount of $8,100,000, maturing each year beginning 1933, and bearing interest at the rate of 5% per cent. No revenues were received under the power contracts until 1928. Thereafter, owing to a shortage of water, the income was not sufficient to pay the interest on the outstanding bonds. In 1931, the attention of the legislature was directed to the critical situation of the Nevada Irrigation District and other similar districts in the state, with the result that, at its session that year, an emergency measure was passed which amended section 32a and added sections 32b to 32e, inclusive, to the California Irrigation District Act (Stats. 1931, p. 777), providing for the adoption by irrigation districts of a plan for refunding their outstanding indebtedness. Pursuant to that act, as amended, the Nevada Irrigation District adopted a refunding plan (herein referred to as the 1931 plan), which was approved, as required, by the California Bond Certification Commission and by the electors of the district. The holders of all of the district’s bonds also approved the plan, and exchanged their bonds for bonds of the first refunding issue. These refunding bonds provided for fixed interest at the rate of 4 per cent and contingent interest (payable only when earned) at the rate of 1 y2 per cent. Provision was made in section VIII of the plan for subsequent modification of its terms and conditions, if that should be deemed desirable by the district, such modification to be accomplished by the approval of the California bond certification commission and the consent of the holders of 75 per cent in principal amount of the refunding bonds then outstanding. The plan provided for a special reserve fund for emergency purposes, and a sinking fund for the retirement of refunding bonds. Subsequently, the income of the district not being sufficient to build up the required reserve fund, and no money being available for the creation of the sinking fund, the district “deemed it desirable” to secure a modification of the terms of the 1931 plan, and on January 1, 1937, submitted to the bondholders such modification whereby the rate of fixed interest was reduced from 4 per cent to 3 per cent (with 2y2 per cent contingent interest). On June 22, 1937, the California districts securities commission (successor to the California bond certification commission) approved the modification, and on August 11, 1937, a special election was held for the purpose of securing the assent of the qualified electors of the district. At such election a majority of the votes were cast in favor of the modification, and it was approved by 90 per cent of the holders of the refunding bonds issued under the 1931 plan.

Petitioner, a nonconsenting bondholder, contends that he is not bound by the terms of the 1937 modification. He presented to the respondent treasurer the coupon maturing July 1, 1937, in the amount of $20, originally attached to his bond. Although there are funds in the treasury of the district available for the purpose, the treasurer refused to pay any amount in excess of $15, on the ground that the interest owing on the bond was reduced from 4 per cent to 3 per cent after January 1, 1937. To avoid a multiplicity of suits by other nonconsenting bondholders, petitioner seeks a determination by this court, under sections 1138-1140 of the Code of Civil Procedure, of the following questions: Whether or not the modification of the 1931 plan is valid, legal and effective; whether such modification is binding upon petitioner and any other bondholders who did not, by their affirmative acts, assent to the modification; and whether the respondents are not under a duty to pay the petitioner the full face amount of the fixed interest coupons attached to his bond. If the court shall find in petitioner’s favor, he asks that a peremptory writ issue ordering the respondent treasurer to pay to petitioner the amount of the present coupon and of all subsequent coupons at the rate of 4 per cent per annum.

Petitioner urges that, inasmuch as there was no provision in the California Irrigation District Act of 1931, supra, authorizing a district, adopting the plan therein provided for the refunding of its outstanding indebtedness, to subsequently modify that plan, section VIII of the 1931 plan above referred to, and which permitted such modification, was without authority of law, and the modification made pursuant thereto is null and void. Section 32a of the act adopted in 1931 declares that the board of directors of any irrigation district which desires to refund its outstanding indebtedness may submit to the California bond certification commission “its proposed plan for funding or refunding such bonds”, and upon approval of the plan by the commission, the board of directors of the district shall call an election for the purpose of authorizing the issuance of such refunding bonds. It places no restriction upon the features to be incorporated in the plan, other than that the maturity of the bonds shall not be more than fifty years from their date and the rate of interest shall not exceed 6 per cent per annum. Even though there was no express statutory authority for the inclusion of the modification clause in the 1931 plan, it was apparently not deemed unfair or unreasonable, for it received the approval of the bond certification commission and of the electors of the district, and was ratified by the bondholders themselves, all of whom exchanged their bonds for the refunding bonds. Each of these latter bonds contained on its face the provision that it was issued under the 1931 plan and was subject to its terms and conditions, “to all of the provisions of which Refunding Bonds [including section VIII of the plan here under attack] the bearer or registered owner of this refunding bond by his acceptance hereof assents”.

The validity of these refunding bonds of the Nevada Irrigation District was the subject of consideration by this court in Mulcahy v. Baldwin, 216 Cal. 517 [15 Pac. (2d) 738], a proceeding to compel the secretary of the board of directors of the district to countersign the bonds. An objection to the bonds in that case was based upon the contention _ that the contract rights of the holders of outstanding bonds who might not elect to convert their holdings into refunding bonds, as well as the rights of contract with the landowners upon the organization of the district, would be impaired by certain provisions of the 1931 Irrigation District Act. The court there stated (p. 526) : “It is elementary that there can be no impairment of a contract by a change thereof if the change is effected with the consent of the contracting party affected thereby.” (Italics added.)

Petitioner claims there is no express or implied provision in the bonds for modifying the interest rate of bonds after their issuance. Section 32d of the Irrigation Act provides that if interest on the bonds of the district is subject to any limitation with respect to its payment, a statement of such limitation must be contained in the bond. Since the 1931 plan contained numerous limitations upon the payment of interest, certain of which could not be determined in advance,—being to some extent dependent on the modification provided for—the only feasible method of incorporating in the bond a statement of such limitations was by setting forth the entire plan, including the provision for its modification. Having accepted the refunding bond with knowledge of the express declaration therein that it was issued under the 1931 plan, and the provision for modification being a part of that plan, petitioner cannot now complain that the district had no authority to insert in the bond any provision that the rate of interest might be changed by subsequent proceedings.

Petitioner further contends that the California districts securities commission had no authority to give consent to such a change in the interest rate of the bonds. The approval of the commission was required by the Irrigation District Act as a condition precedent to the effectiveness of the plan provided for in section 32a. Accordingly, such a plan (containing a proviso permitting a subsequent modification of its terms and conditions without limitation) having been submitted to and having received the required approval of the commission, and having been voluntarily approved by the electors of the district and the bondholders, it cannot now be urged that the commission had not the right to consent to that to which all the parties involved had agreed it might consent—a modification of the plan. As an indication that such a provision for modification was regarded by the legislature as reasonable and lawful, that body, at its 1937 session, passed an emergency measure amending section 32a (Stats. 1937, p. 457), by expressly declaring that a provision for modification may be inserted in a plan adopted under the act as amended in 1931, and if the proposed modifications meet with the approval of the commission, the directors of the district shall call an election to authorize such modifications, a majority vote only being required for such authorization. The urgency clause attached to this amendment recites that certain of the districts “have reserved as a condition to said plan so approved [by the Commission and the electors] the right to modify such plan prior to its consummation and thereafter have found it necessary to modify such original, proposed plans in one or more respects”, the purpose of the 1937 amendment being to immediately clarify the former statute so as to clearly authorize modification of the proposed plans of the districts for refunding their bonded indebtedness.

Petitioner states that the “statutes will be searched in vain for any authority to give the holders of three-fourths of outstanding bonds authority to bind the other bondholders to a modification of the terms of the bond”, citing in support of his contention the decision of this court in County of Los Angeles v. Rockhold, 3 Cal. (2d) 192 [44 Pac. (2d) 340, 100 A. L. R. 149], That ease is not in point. The refunding proceedings there involved were instituted pursuant to the provisions of the Refunding Special Assessment Bond Act of 1933 (Stats. 1933, p. 1915), providing (sec. 15) that the refunding could take place when 75 per cent of the holders of the outstanding bonds consented. The court held that the act did not adequately safeguard the rights of the 25 per cent of dissenting bondholders, and was therefore unconstitutional, saying: “There can be no doubt that it is indispensable, from a constitutional standpoint, so far as bondholders are concerned, that either 100 per cent consent to the change or that the dissenting bondholders be so taken care of that no impairment of their contract ensues.” That ease is clearly distinguishable from the present proceeding, where the refunding plan was adopted and assented to by all of the bondholders. A sufficient answer to petitioner’s contention is that he did deposit his original bond for cancellation and accept in its place the refunding bond specifically incorporating in its terms the provision for modification of the 1931 plan with the “approval of the . . . holders of seventy-five (75) per cent in principal amount of the Refunding Bonds then outstanding”, such modification to be “binding upon the holders of the then issued and outstanding Refunding Bonds”. Upon this acceptance of the refunding plan and the cancellation of the original bonds, a change was effected in the affairs of the district, and its board of directors was justified in relying upon the agreement of the bondholders, including petitioner, that the plan might subsequently be modified, “if it should be deemed desirable”.

The next, assertion of petitioner is that the 1937 modification, by its terms, would become effective and binding on all the bondholders only when an election was held in the district for the purpose of approving the modification, and that there was no authority for such an election when the modification was drawn and the bonds were issued. The modification was submitted to the bondholders on January 1, 1937. It was approved by the California districts securities commission on June 22d, and the special election called for the purpose of securing assent of the electors of the district was held on August 11th. As previously stated, the legislature, in 1937, amended section 32a of the California Irrigation District Act (Stats. 1937; p. 457) by providing that “When any district shall have submitted its proposed plan for funding or refunding such bonds to the California districts securities commission, and as one of the terms or conditions of such plan, has reserved the right to modify such plan one or more times, and said commission shall have approved such plan, and when the board of directors of such district shall thereafter desire to modify such plan, such .board of directors may submit the proposed modifications of such plan for approval to said California districts securities commission”, and, upon such approval, shall call an election for the purpose of authorizing such modifications, a majority vote only being required. Recognizing that certain districts had reserved “as a condition to said plan so approved the right to modify such plan prior to its consummation and thereafter have found it necessary to modify such original proposed plan in one or more respects”, the legislature declared this amendment to be an urgency measure, to go into immediate effect in order to clarify the statute so as to clearly authorize districts to modify their proposed plans for refunding their bonded indebtedness, thus avoiding the necessity for advancement by such districts of “large cash payments for maturing bonds and interest coupons on July 1, 1937, leaving them without sufficient funds to enable them to operate properly and efficiently their distribution works”. This act was signed by the governor and became effective on May 4, 1937. Therefore, when the final procedural step was taken, that is, the election for the purpose of approving the modification, the 1937 amendment to section 32a was in full force and effect.

Petitioner attacks this amendment as special legislation, and violative of article IV, section 25, subdivisions 11 ■and 19 of the Constitution. In Mulcahy v. Baldwin, supra, a similar objection was made to the validity of the 1931 amendments to the Irrigation Act. The objection was overruled by the court. The 1937 act is merely an amendment of section 32a. It applies equally to all irrigation districts which have taken advantage of the statute authorizing a plan for the refunding of their outstanding indebtedness and, as a condition of such plan, have reserved the right to modify it. “A law is general and uniform and affords equal protection in its operation when it applies equally to all persons embraced within the class to which it is addressed, provided that such class is founded upon some natural or intrinsic or constitutional distinction between the persons composing it and others not embraced in it.” (Ex parte Weisberg, 215 Cal. 624 [12 Pac. (2d) 446].) The question of classification is generally one for the legislative power, to be determined by it in the light of its knowledge of all the circumstances and requirements, and its discretion will not be overthrown unless it is palpably arbitrary. (Wores v. Imperial Irr. Dist., 193 Cal. 609 [227 Pac. 181].) It will be presumed that the legislature made inquiry to determine whether or not there were evils to be remedied and that the classification made was based upon the result of the inquiry. (Ex parte Girard, 186 Cal. 718 [200 Pac. 593]; 3 Cal. Jur. Ten-year Supp., p. 803.)

The next complaint of petitioner is that the facts allegedly justifying the urgency feature of the statute “do not show any necessity for the preservation of the public peace, health and safety, and therefore the act did not go into effect until the regular time in August”. Authority is conferred upon the legislature to determine when urgency measures are necessary, and when such necessity has been determined as provided by the Constitution, the judgment of the legislature is final, and will not be interfered with by the courts unless no declaration of facts constituting such emergency is included in the act or unless the statement of facts is so clearly insufficient as to leave no reasonable doubt that the urgency does not exist. (Hollister v. Kingsbury, 129 Cal. App. 420 [18 Pac. (2d) 1006].) We see no reason, in the present instance, for interfering with the legislative determination that an emergency existed.

The final contention of petitioner is that the reduction of interest on bonds already issued was not such a “modification” as was contemplated by section VIII of the 1931 plan. Under that plan the original rate of 5% per cent interest was changed to 4 per cent, with a 1% per cent contingent interest. In the 1937 plan, now under attack, there was a further change, in that the fixed interest was reduced' to 3 per cent with a 2y2 per cent contingent interest—the aggregate of fixed and contingent interest always remaining at 5y2 per cent. We are of the view that this was such a modification as was contemplated by section VIII. In the last analysis, the change resolves itself into merely a readjustment of the method of paying interest on the bonds, and is essential to preserve the security of the bondholders in accordance with the fundamental principles upon which the 1931 plan was based. Petitioner cannot now be heard to assert, five years after the refunding bonds issued under this plan were approved by this court in Mulcahy v. Baldwin, supra, that he is not bound by all the terms and conditions clearly and specifically incorporated in those bonds. Ninety per cent of the bondholders agreed that the further modification of the plan in 1937 was fair, equitable and reasonable, and for the best interests of all the bondholders. Because of the form of the refunding bonds, held by the petitioner and the incorporation therein by reference of the 1931 plan, the petitioner will be held to have agreed that even seventy-five per cent of the holders of the refunding bonds could bind the holders of all thereof. We conclude therefore that the directors of the district had the authority, with the consent of the bondholders theretofore given, to modify the 1931 plan with reference to the payment of interest, and to fix such interest on the refunding bonds at 3 per cent in accordance with the terms of the 1937 modification.

J. R. Mason, one of the interveners in this controversy, was the owner of a number of bonds of the Nevada Irrigation District. He exchanged eleven bonds of the original issue for refunding bonds under the 1931 plan, and subsequently purchased additional refunding bonds in the open market. Gilbert Moody, the other intervener, is the holder of certain interest coupons detached from one of the refunding bonds. "On the face of all these bonds appeared the following: “This refunding bond is one of an authorized issue of refunding bonds of Nevada Irrigation District . . . known as its First Refunding Issue, . . . and all issued under and subject to the provisions of a Refunding Plan dated June 1, 1931, to which Refunding Plan reference is hereby made for a statement of . . . the rights of the holders of the refunding bonds and of interest coupons in respect thereto, and the terms and conditions upon which the refunding bonds are issued and secured, to all of the provisions of which Refunding Plan the bearer or registered owner of this refunding bond by his acceptance hereof assents.” Notwithstanding this provision in the refunding bonds, interveners deny that they are bound thereby. J. R. Mason alleges that, while “expressly repudiating” the 1931 plan, he did exchange eleven of his bonds of the original issue for refunding bonds, and has since purchased thirty-four additional refunding bonds. It is only necessary to say, in reply to the contention of the interveners, that, having accepted the refunding- bonds, they are bound b3 all the provisions contained therein.

Interveners further allege that the district’s obligation to pay interest at the rate of 4 per cent was “to be absolute and unconditional”. A reading of the 1931 plan fails to disclose the use of the words “absolute and unconditional”. The 4 per cent interest was therein referred to as “fixed interest” to distinguish it from the “contingent interest” provided for. In any event, interest was to remain at the rate fixed unless and until there was a modification of the terms and conditions of the plan. The rate of interest to be paid on the bonds was but one feature of the plan which the directors of the district “deemed it desirable” to modify.

The principal contentions made by the interveners and amicus curiae have already been disposed of. We do not deem it necessary to discuss other points raised by them.

The legality of the refunding bonds issued under the 1931 plan having been established in the case of Mulcahy v. Baldwin, supra, and the 1937 modification, having been prepared in accordance with the terms of that plan and having received the approval of the directors and of a majority of the electors of the district, as well as the California districts securities commission and of more than the required 75 per cent of the holders of the refunding bonds issued under the plan, such modification is valid, legal and effective. The non-consenting bondholders, by their agreement lawfully expressed, are bound thereby. The 1937 modification properly relates, among other things, to a change in the rate of interest on the bonds already issued. Petitioner, therefore, is entitled to but 3 per cent interest on his bond, together with the 2% per cent contingent interest, from and after January 1, 1937, pursuant to the provisions of the 1937 modification.

The peremptory writ is denied.

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

Rehearing denied.


text:
    [S. F. No. 15855.
    In Bank.
    February 24, 1938.]
    RECLAMATION DISTRICT No. 1619 (a Public Corporation), Petitioner, v. C. L. DODGE, as County Treasurer, etc., Respondent.

      Roscoe E. Jordan for Petitioner.
    Francis P. Healey and Francis W. Collins for Respondent.
   WASTE, C. J.

Petitioner, a reclamation district situate in Contra Costa County, seeks the issuance of a writ of mandamus compelling the respondent, as treasurer of that county, to give and publish notice of sale and to hold a sale of certain bonds issued by it. Respondent has demurred generally.

The petition alleges the regularity and validity of the organization of the district in 1914H915 in Contra Costa County and within the Sacramento and San Joaquin drainage district, and the election and qualification of a board of trustees. It then alleges that said board of trustees made and rendered their report to the board of supervisors for an original plan of reclamation work together with an estimate of the cost thereof; that thereafter three disinterested commissioners were appointed to view and assess upon the lands of the district and apportion the same according to benefits the cost of said proposed reclamation work, which was done; that the commissioners thereafter made and filed with the board of supervisors an assessment list showing the charges assessed against each tract of land in the district; that due notice was given of the time and place fixed by the board of supervisors for the hearing of objections to said assessment; that no objections were made thereto and the same was approved by the board of supervisors; that the assessment was fully paid but the board of trustees discovered ■ and concluded that it was insufficient to provide for the reclamation of the land in the district as contemplated in the above-mentioned plan of reclamation; that the trustees thereupon presented to the board of supervisors a statement of the work to be done and its estimated cost and the board of supervisors directed the commissioners who had made the original assessment to assess the -same, against the lands in the district according to the benefits to accrue therefrom; that this was accordingly done and an assessment list disclosing the same was filed with the board of supervisors; that no objections were made to said assessment at the hearing duly noticed therefor and the same has been fully paid; that the district completed all work called for in the plan of reclamation and fully paid therefor; that subsequently and on January 31, 1918, the trustees of the district reported the reclamation work finished and that in the future it would only require funds for the maintenance and repair of the same and petitioned the board of supervisors to appoint assessment commissioners; that assessment commissioners were so appointed and, pursuant to order, prepared and filed an assessment valuation list, which was thereafter duly revised and corrected; that no objections to either the original or revised assessment valuation list were made at the hearing duly noticed therefor, whereupon the board of supervisors approved the same; that thereafter and based upon said assessment valuation list, the trustees levied various assessments on the lands in the district for the purpose of raising money to defray the costs and expenses of maintaining and repairing the reclamation work; that on July 25, 1935, the trustees in meeting assembled enacted a resolution and order, pursuant to the provisions of section 3480 of the Political Code, calling a special election of the landowners for the purpose of bonding the district to raise money for the purpose of paying outstanding warrants and interest thereon and to continue the maintenance and repair of the reclamation work; that at such duly noticed and specially held election a large majority of the votes cast favored the issuance of said bonds; that on January 23, 1936, the trustees levied and apportioned an assessment in the sum of $60,000 on all the lands in the district and directed the issuance of bonds in said amount, bearing interest at the rate of 5 per cent'; that notice thereof was published as required by law; that the assessment so levied was filed, as required, in the office of the county treasurer; that on March 10, 1936, the trustees caused to be prepared and signed by the president, of the district, attested by the county auditor, and delivered to the respondent county treasurer, sixty $1,000 bonds of the district, bearing interest at 5 per cent, and serially numbered from 1 to 60; that immediately thereafter the district, petitioner herein, as plaintiff instituted a validation proceeding in the superior court, as authorized by section 3480, supra; that no appearances were made or answers filed by or on behalf of any defendant or land or landowner, and the default of the defendants was entered therein; that on or about June 5,1936, the superior court made and entered its amended judgment validating the bond issue, which judgment, it is declared in section 3480, supra, “shall be considered as a judgment in rem and shall be conclusive against said district and against all lands therein and all owners thereof and other interested persons”; that thereafter and on November 12, 1936, the trustees enacted a resolution requesting the respondent treasurer to publish notice of sale of the bonds and to sell the same in accordance with law; and that the respondent treasurer in writing refused so to do.

In support of his demurrer to the petition, and of his refusal to act in the manner requested, the respondent treasurer has abandoned, as being without merit, all contentions heretofore advanced by him except that having to do with the alleged failure of the petitioning district to comply with the provisions of section 3455a of the Political Code. Briefly, the section requires, among other things, that any reclamation district, such as petitioner, located in whole or in part within the Sacramento and San Joaquin drainage district must obtain the approval of the state board of reclamation of its plan of reclamation.

The provision of the cited section requiring such prior approval presents no obstacle to the issuance of the writ here sought. It is apparent from the allegations of the petition, which for present purposes stand admitted by demurrer, that the petitioning district was organized and its plan of reclamation adopted and carried out at a time when the section did not require such prior approval. The section was amended in 1917 to so provide. (Stats. 1917, p. 1198.) On the other hand, a reading of the petition in the light of the pertinent sections of the Political Code (3446 et seq.), as they read at the time of the organization of the petitioning district and the adoption and carrying out of its plan of reclamation, discloses complete conformity with the applicable law on the subject. It also appears that the district long since has completed its plan of reclamation and had so notified the board of supervisors, as required, at which time it was indicated that thereafter the district would only require funds for the maintenance and repair of said work of reclamation whereupon, pursuant to petition, assessment commissioners were appointed and an assessment valuation list adopted and approved, without objection, which list thereafter was to be employed as the basis for levying assessments for the purpose of raising money with which to defray the cost of repairing and maintaining the reclamation work. As we read the petition and the exhibits attached thereto, the moneys to be derived under the assessment of January 23, 1936, and the bonds issued pursuant thereto which it is here sought to compel the respondent to advertise and sell, are to be employed as authorized by the provision of section 3456, reading as follows: hereafter [i. e., following completion of reclamation plan and' adoption of assessment valuation list, as here] whenever in the opinion of the trustees of the district, it shall be necessary to raise any sum for the construction, maintenance or repair of the works of reclamation, or for the incidental expenses of the district, the said board of trustees shall make an order, which order shall be entered in the minutes of the board and shall recite the total amount necessary to be raised and shall fix a rate designating the number of cents to be levied on each one hundred dollars of assessment valuation shown on the list prepared and approved in the manner hereinabove provided ...” The foregoing and all following provisions of the section, from the admitted allegations of the petition, appear to have been carefully complied with by the trustees of the district in levying and filing said assessment and issuing the bonds thereunder.

There is nothing in the petition to indicate that the moneys to be derived under the assessment or from the bond's are to be employed in any new or additional work of reclamation in the district and, therefore, the present provision of section 3455a requiring prior approval of the state board of reclamation is without application. However, even if some modifications in the plan of reclamation were contemplated, the following reasoning would appear to be pertinent: “As long as the modifications did not materially affect the general plan it was within the discretion of the trustees to adopt them without the direction of said board. The purposes of said statute [in this case, section 3455a supra] was, of course, to secure, as far as practicable, harmony and uniformity among the various districts in the promotion of reclamation throughout the Sacramento and San Joaquin Valleys, and we can see nothing in the course pursued herein tending to nullify or defeat such purpose.” (Silva v. Reclamation Dist., 41 Cal. App. 326, 331 [182 Pac. 786], hearing denied in this court.)

Let a peremptory writ issue as prayed.

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


text:
    [Sac. No. 5051.
    In Bank.
    February 24, 1938.]
    In the Matter of the Guardianship of the Estate of RAYMOND COPSEY, an Incompetent Person. FRANK T. HINES, Administrator of Veterans' Affairs, Appellant, v. LENA COPSEY, Guardian, etc., Respondent.

      James B. Burns, Chief Attorney, Veterans’ Administrator, and A. J. Whalen, Assistant Chief Attorney, for Appellant.
    Taft & Spurr, Arthur L. Wessels and Frank W. Taft for Respondent.
   CURTIS, J.

This is an appeal taken by Frank T. Hines, Administrator of Aeterans’ Affairs, from a portion of an order of the Probate Court of Mendocino County, settling the thirteenth annual account of the guardian of the estate of Raymond Copsey, an incompetent person. Raymond Copsey, the incompetent person, was a veteran of the World War, having enlisted on September 7, 1917. His entire estate consisted of funds derived from the government of the United States, in pursuance of the World War Insurance Act, and other federal statutes providing for federal aid to soldiers who served in said war, which estate had been administered since June, 1922, by his sister, Lena Copsey, under letters of guardianship issued out of said probate court. In August, 1935, she presented to said probate court her thirteenth annual account in which she sought to have the Bank of America National Trust and Savings Association appointed as guardian in her place and stead, and also sought to have the court fix and determine a reasonable allowance monthly for the support of the aged father and mother of the incompetent. The said account set forth in detail the various sums of money received from the United States government at the rate of $100 per month as compensation payments, and the sum of $11,945, received in pursuance of the allowance on June 6, 1935, of a claim for permanent disability benefits under a World War insurance certificate for total permanent disability at the rate of $57.50 per month from June 19, 1918, and paid in a lump sum to the guardian of the incompetent person by the United States government. The account also showed the total disbursements for the period subsequent to the last annual accounting of $1,022.69, which left a balance of $17,581.36 in the hands of the guardian. The guardian petitioned in said account that the court fix a reasonable fee to be paid to her as guardian, and also that the court fix a reasonable fee to be paid to her attorney, A. L. Wessels, for his ordinary services as attorney for the guardian since the date of the filing of the previous annual account, and also fix and determine “a reasonable sum to be paid to A. L. Wessels, for his extraordinary services as attorney for said guardian, since her appointment as guardian aforesaid on June 9, 1922, in taking all necessary proceedings, in performing all necessary acts, in preparing all necessary forms of applications, claims and documents, and in the prosecution of such claims, for the sum of $57.50 per month due said ward under the provisions of his World War Insurance Certificate, and in securing the allowance of such claim wherein and whereby the ward was allowed and paid by the Veterans’ Administration the sum of $11,945.00 on August 1, 1935, being the amount that was due and owing said ward under his War Risk Insurance Certificate, at the rate of $57.50 from the 19th day of June, 1918, ...” The order approving said account allowed to the attorney for his ordinary services since the filing of the previous annual account, the sum of $649.49, being 5 per cent of the gross income of said estate during said period, which income included the sum of $11,945, received pursuant to the allowance of the claim for total permanent disability benefit to the incompetent veteran since June 19, 1918. Said order likewise allowed and authorized to be paid to said attorney by the guardian out of the estate of the incompetent veteran, “the sum of $4,000.00 for extraordinary services rendered by him since the 9th day of June, 1922, in taking all necessary proceedings and in the prosecution of the claim of Raymond Copsey for insurance benefits under his War Risk Insurance Certificate, and in securing for him and said estate the sum of $11,945.00, being the amount due him at the rate of $57.50 per month under the provisions of said War Risk Insurance Certificate since the 19th day of June, 1918, down to the first day of August, 1935, and also securing for him the sum of $57.50 per month each month from and after the first day of August, 1935, and so long as the said Raymond Copsey may live. ...” It is from that portion of the order which allowed said fees to the attorney for said ordinary services in the sum of $649.49, and for said extraordinary services in the sum of $4,000 that this appeal is taken. However, no contention is made in the briefs of the appellant with reference to the allowance of attorneys’ fees for ordinary services, and this question will not, therefore, be discussed.

In Guardianship of Copsey, 7 Cal. (2d) 199, 200 [60 Pac. (2d) 121], the question was presented to this court, upon a motion to dismiss the appeal, of whether the administrator of veterans ’ affairs had the right to take an appeal from such order. It was there hold affirmatively that the administrator of veterans’ affairs was a party aggrieved with a right to appeal from an order allowing attorneys’ fees out of the estate of an incompetent war veteran where the estate consisted of money derived from the federal government in pursuance of the World War Insurance Act and other federal statutes. The opinion further held that the fact that the administrator of veterans’ affairs did not appear at the hearing of the guardian’s account and object to its settlement did not deprive him of the right to appeal therefrom.

Appellant contends that inasmuch as section 551 of the World.War Veterans’ Act (38 U. S. C. A. 551) fixes the fees which an attorney can receive in matters pertaining to recovery of war risk insurance matters (i. e., at a sum not to exceed $10 for assistance in the preparation of the necessary papers in any application to the veterans ’ administration or, if suit be brought, such sum as a part of a judgment-recovered as the court may allow, not exceeding 10 per cent thereof, and provided that any attempt to solicit, contract for, charge, or receive any fee or compensation, except as so provided, is a misdemeanor), the allowance by the court in this proceeding of a fee of $4,000 to an attorney for services performed in the procurement of the payment of a permanent disability benefit in the sum of $11,945, and $57.50 for the remainder of the life of the veteran, was clearly exorbitant and invalid, and against the express provisions of said section.

Said section 551 of title 38 of the United States Code reads as follows: “Amount permitted to be paid agents or attorneys : SOLICITATION, ETC., OP UNAUTHORIZED PEES OR COMPENSATIONS : punishment. Except in the event of legal proceedings under section 445 of this chapter, no claim agent or attorney except the recognized representatives of the American Red Cross, the American Legion, the Disabled American Veterans, and Veterans of Foreign Wars, and such other organizations as shall be approved by the director shall be recognized in the presentation or adjudication of claims under Parts II, III, and IV of this chapter, and payment to any attorney or agent for such assistance as may be required in the preparation and execution of the necessary papers in any application to the bureau shall not exceed $10 in any one case; Provided, however, That wherever a judgment or decree shall be rendered in an action brought pursuant to said section 445 of this chapter the court, as a part of its judgment or decree, shall determine and allow reasonable fees for the attorneys of the successful party or parties and apportion same if proper, said fees not to exceed 10 per centum of the amount recovered and to be paid by the bureau out of the payments to be made under the judgment or decree at a rate not exceeding one-tenth of each of such payments until paid. Any person who shall, directly or indirectly, solicit, contract for, charge, or receive, or who shall attempt to solicit, contract for, charge, or receive, any fee or compensation, except as herein provided, shall be guilty of a misdemeanor, and for each and every offense shall be punishable by a fine of not more than $500 or by imprisonment at hard labor for not more than two years, or both such fine and imprisonment.”

The authority of Congress to fix fees for attorneys on claims against the government, as set forth in section 551, title 38 of the United States Code, has been upheld by the Circuit Courts of the United States. {Lopez v. United States, 17 Fed. (2d) 462; Purvis v. United States, 61 Fed. (2d) 992. See, also Welty v. United States, 2 Fed. (2d) 562.) And in Margolin v. United States, 269 U. S. 93 [46 Sup. Ct. 64, 70 L. Ed. 176], the United States Supreme Court affirmed a sentence imposed by the District Court on an attorney for receiving a fee of $1500 as compensation for services in preparing and presenting to the veterans’ bureau a claim for insurance money under the War Risk Insurance Act. The above cited eases deal with cases of competent veterans, and establish beyond dispute that Congress in order to protect veterans from extortionate fees for the performance of services by attorneys and to see that the money allowed to war veterans in insurance is properly and economically administered possesses the constitutional power to regulate charges that can be made for services rendered to applicants for compensation under the War Risk Insurance Act. In view of the fact that incompetent persons are made the special wards of the court, and it is the duty of the court to protect them and their property {Guardianship of Copsey, supra), it would seem to follow as a matter of reason and logic that attorneys’ fees, in excess of the schedule set out in section 551, title 38, United States Code, as permissible to be allowed an attorney for a competent veteran, could not be validly allowed to the attorney for the guardian of an incompetent veteran. Several state courts have so held. (In re Shinberg, 238 App. Div. 74 [263 N. Y. Supp. 654]; In re Roy C. Minor, 164 Miss. 329 [145 So. 507]; Hines v. McCoy, 172 Miss. 153 [159 So. 306].) If the government is zealous to protect competent veterans from unreasonable expense in the collection of their claims for government aid, with how much more reason should the estates of incompetent veterans be protected from excessive charges. We are, however, squarely faced with the recent decision of the United States Supreme Court in the case of Hines v. Stein, as Guardian, etc., 298 U. S. 94 [56 Sup. Ct. 699, 80 L. Ed. 1063], decided April 27, 1936, in which the court held: “We find nothing in these Acts of Congress which definitely undertakes to put limitation upon state courts in respect of guardians or to permit any executive officer, by rule or otherwise, to disregard' and set at naught orders by courts to guardians appointed by them.” The court therein affirmed the order of the court of common pleas of Allegheny County, Pennsylvania, fixing and allowing attorneys’ fees in the sum of $100 for special services rendered by him in a guardianship matter, and rejected the contention of the administrator of veterans’ affairs that the fee should be limited to actual expenses incurred and a fee of $2. The court concludes with the statement that, “The broad purpose of regulations in respect of fees of those concerned with pension matters is to protect the United States and beneficiaries against extortion, imposition or fraud. (Calhoun v. Massie, 253 U. S. 170, 173 [40 Sup. Ct. 474, 64 L. Ed. 843].) Dangers of this character are not to be expected in connection with the orderly exercise of authority by state courts over appointees properly entrusted with pension funds.” Although the above case deals with compensation payments, whereas the instant case deals with insurance, and although the sections involved are different, sections 111, 114 and 115 of title 38, U. S. C. A., being involved in the cited case, whereas section 551 of title 38, U. S. C. A., is the section which governs and controls in the instant case, these differences do not furnish a logical basis for a distinction between the cited case and the instant ease nor furnish us with a reasonable basis for holding that the ease of Hines v. Stein, supra, is not controlling in the instant case. We are, therefore, constrained to hold, by virtue of this recent decision of the United States Supreme Court, that the probate court ip the instant ease could validly allow an attorney's fee for services rendered to the guardian of an incompetent veteran in excess of the schedule set out in section 551 of title 38 of the United States Code.

However we question whether the fee allowed in the instant ease was justified under the facts before the probate court. The final account set out in minute detail the nature of the work performed by the attorney in the instant case, and the findings of the court upon which the allowance was based, as contained in the order approving the final account, follow the allegations of the petition closely. It clearly and conclusively appears from the record that the $4,000 attorney’s fee was allowed for extraordinary services performed solely in the recovery for the estate of the incompetent of said sum of $11,945 and the future allowance of $57.50 during the lifetime of the incompetent veteran. It further appears that no action was ever brought to recover said amount, but the same was allowed and paid to the guardian upon the presentation of a claim by her to the Veterans’ Administration. Under the terms of section 551, title 38, of the United States Code, it will be noted that in an action brought to recover permanent disability benefits, the court in such action may allow reasonable attorneys’ fees not to exceed 10 per cent of the amount recovered. While we have held that the probate court was not limited by this provision of the United States Code to the amounts therein provided to be paid attorneys in proceedings to collect thereunder, yet in our opinion, this provision does furnish some reasonable standard which courts should follow in allowing attorneys’ fees in cases of this character. The fees allowed in this case by the court were almost four times as large as those permitted by section 551, title 38 of the United States Code in cases where actions were instituted and prosecuted to judgment. Here, as we have seen, no action was brought and the amount was recovered upon the presentation of a claim to the Veterans’ Administration. As a general rule the work and labor involved in collecting an account without suit is far less than where suit is instituted and prosecuted to judgment. That Congress appreciated this view is shown by the provisions of said section 551 wherein the fee to be charged for the preparation of a claim under the World War Veterans’ Act was fixed at =$10, but in case of suit brought and judgment rendered, fees not to exceed 10 per cent of the amount of recovery may be charged by the attorney prosecuting the suit. We do not wish to be understood as intimating, that the fee fixed by said section 551 for preparing a claim thereunder is adequate compensation for the services rendered by the attorney for the incompetent Copsey, yet as we understand said section, had the same services been rendered by an attorney for a competent person, the attorney would have been limited in his charges to the sum of $10 and liable to criminal prosecution should his charge exceed that amount. (Margolin v. United States, 269 U. S. 93 [46 Sup. Ct. 64, 70 L. Ed. 176].) We are, however, unable to perceive upon what reasonable theory the probate court proceeded in allowing an attorney's fee for services performed in preparing a claim for presentation at almost four times the amount which the United States Code fixes as compensation for an attorney who brings to a successful termination a suit upon a like claim.

We are not unmindful of the rule that the fixing of attorneys’ fees in estates of incompetent persons is largely in the discretion of the probate court. We cannot, however, reconcile the action of the probate court in this instance with a proper and reasonable exercise of the discretion vested in said court. The amount so fixed is so clearly in excess of a proper fee for such services that we think it could only have been allowed through an inadvertence on the part of the trial court, due perhaps to the fact that the allowance was unopposed. It should perhaps be noted here that the final account, a copy of which was forwarded to the administrator of veterans’ affairs, contained no statement of the amount of attorneys’ fees sought to be allowed, but only prayed for the fixing of a reasonable attorney’s fee. The absence of any knowledge that a fee so disproportionate to the value of the services rendered would be asked or allowed may well account for the failure of the administrator of veterans’ affairs to appear in said matter. While we must concede in the face of the decision of the United States Supreme Court in the case of Hines v. Stein, swpra, the right of the state court to fix reasonable attorneys’ fees for services rendered to the guardian of an incompetent veteran, which fees need not coincide with the schedule of fees fixed by section 551 of title 38 of the United States Code, nevertheless we are of the opinion that the criterion set up by Congress as a measure of protection to be afforded to a competent veteran may well serve as a standard or yardstick for a proper and reasonable fee for the same services rendered to the guardian of an incompetent veteran. And if, as measured by said standard, the allowance made by the probate court is clearly unreasonable, then it is the duty of an appellate court, upon whom, equally with the lower court, rests the duty of protecting the property and estates of incompetents and minors, to reverse said order upon the ground that the lower court in making said order abused its discretion. We are not overlooking the fact that the evidence in the instant case was not brought up on appeal. However, since the order making the allowance is predicated upon the findings setting forth in detail the nature of the work performed by the attorney, and we are satisfied that these findings are not sufficient to warrant the order made, the failure to bring up the evidence is immaterial.

For the guidance of the probate court in arriving at the proper fee to be allowed in the instant ease, it may be appropriate to say that we are of the opinion that a fee which would be allowed to an attorney for a competent veteran if a suit had been brought as set out in section 551, title 38, United States Code, is the maximum fee which may be allowed, and that probably a smaller fee would be more in accordance with the merits of the case. We are also of the opinion that in arriving at a reasonable attorney's fee in the present matter, the fact should be taken into consideration that the attorney in receiving $649.49 for his ordinary services, which was 5 per cent of the gross income for the year in which the bulk of the permanent disability benefit of $11,945 was paid, has already received, at least in part, compensation for his services in securing the permanent disability benefit award.

That portion of the order appealed from fixing the fees of the attorney for ordinary services rendered the guardian of the incompetent is hereby affirmed, and that portion of said order fixing the fees of the attorney for extraordinary services rendered the guardian of the incompetent is hereby reversed.

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


author: THE COURT.

text:
    [Sac. Nos. 5144, 5145.
    In Bank.
    February 25, 1938.]
    STANDARD OIL COMPANY OF CALIFORNIA (a Corporation), Appellant, v. CHARLES G. JOHNSON, as State Treasurer, etc., Respondent.

      Pillsbury, Madison & Sutro, Felix T. Smith and Sigvald Nielson for Appellant.
    U. S. Webb, Attorney-General, and H. H. Linney and James J. Arditto, Deputies Attorney-General, for Respondent.
   THE COURT.

The appeals in several actions brought by the plaintiff, Standard Oil Company of California, involve the question whether sales of gasoline in certain national parks are subject to the tax imposed by the Motor Vehicle Fuel License Tax Act (Stats. 1923, p. 577, as amended Stats. 1933, p. 1643). These appeals have been consolidated for determination. A related question is presented in the companion case of Yosemite Park & Curry Co. v. Johnson, post, p. 770 [76 Pac. (2d) 1191], wherein the Sales Tax Act (Stats. 1933, p. 2599, as amended), is involved. The determination herein will control the disposition of the same questions presented in the Vosemite Park and Curry Company case, and the discussion herein with reference to the effect of the retail sales tax will be deemed sufficient for that purpose.

Standard Oil Company by its several actions sought to recover gasoline taxes paid under protest, which were imposed for the distribution and sale of gasoline within the boundaries of Yosemite national park, Sequoia national park and General Grant national park, located within the territorial limits of California.

The plaintiff is a private corporation authorized to do business in California. The problem revolves around the question whether the state of California ceded exclusive jurisdiction to the United States government of the areas comprising the various national parks in such a way as to divest itself of jurisdiction to impose and collect the taxes so paid under protest.

Demurrers to the various complaints were sustained and judgment entered for the defendants. The plaintiff appeals.

On February 2, 1848, by the treaty of Guadalupe Hidalgo, the Republic of Mexico ceded to the United States government all the lands within the territorial limits of California. The United States thereby became vested with the title to all such lands not held in private ownership. (Thompson v. Doaksum, 68 Cal. 593, 596 [10 Pac. 199].) The areas now comprising the national parks hereinbefore mentioned were therefore then public lands. The United States retained title to these public lands upon the admission of California to statehood. (9 Stats. 452.)

On June 30, 1864 (13 Stats. 325), that portion of Yosemite national park designated in the act as the “ ‘Cleft’ or ‘Gorge’ in the Granite Peak of the Sierra Nevada mountains situated in the county of Mariposa . . . and the headwaters of the Merced River, and known as the Yo-Semite valley”, was granted to the state of California upon the express condition that the ‘ ‘ premises shall be held for public use, resort, and recreation”. By the same act ‘‘Mariposa Big Tree Grove”, comprising four sections of land, was granted upon like conditions.

On October 1, 1890 (26 Stats. 650), congress set apart as a national forest and withdrew from sale and occupancy certain tracts of the public lands in the Sierra Nevada, but expressly excepted therefrom the Yosemite Valley and Mariposa big tree grove theretofore granted to California. A portion of those reserves surrounding Yosemite Valley was later, on February 7, 1905, designated as “Yosemite National Park”. (33 Stats. 702.)

On March 3, 1905 (Stats. 1905, p. 54), California receded and regranted to the United States without reservation the “Cleft” or “Gorge” known as Yosemite Valley, and the “Mariposa Big Tree Grove”, and resigned the trusts created and granted by the act of congress of June 30, 1864, upon condition that the lands be held by the United States for public use, resort and recreation. This recession was accepted by congress on June 11,1906 (34 Stats. 831), and the areas by the same act were included as part of Yosemite National Park.

The area comprising Sequoia national park was withdrawn from occupancy and sale and dedicated' as a public park on September 24, 1890 (26 Stats. 478). An act of congress (26 Stats. 651), enacted on October 1, 1890, established General Grant national park.

At the time of the recession to the United States of the Yosemite Valley and Mariposa big tree grove there Was in effect a statute passed by the legislature of California in 1891 (Stats. 1891, p. 262), providing: “The State of California hereby cedes to the United States of America exclusive jurisdiction over such piece or parcel of land as may have been or may be hereafter ceded or conveyed to the United States, during the time the United States shall be or remain the owner thereof, for all purposes except the administration of the criminal laws of this state and the service of civil process therein.”

The plaintiff relies upon the foregoing quoted statute, together with the act of recession of 1905, as supporting its claim that the state of California by the regrant had relinquished exclusive jurisdiction to the United States in the area known as Yosemite Valley, wherein occurred most of the transactions upon which the taxes involved were imposed and collected.

The defendant, however, contends that the act of the California legislature approved April 15,1919 (Stats. 1919, p. 74), ceding to the national government jurisdiction over Yosemite national park, Sequoia national park and General Grant national park, and the act of acceptance by congress on June 2, 1920 (41 Stats. 731), constitute the basis upon which depend the rights of the state herein.

The legislative act of 1919 in its pertinent parts provides: ‘ ‘ Exclusive jurisdiction shall be and the same is hereby ceded to the United States over and within all of the territory which is now or may hereafter be included in those several tracts of land in the State of California set aside and dedicated for park purposes by the United States as ‘Yosemite national park, Sequoia national park’ and ‘ General Grant national park’ respectively; saving, however, to the state of California the right to serve civil or criminal process within the limits of the aforesaid parks . . . and saving further, to the said state the right to tax' persons and corporations, their franchises and property on the lands included in said parks, and the right to fix and collect license fees for fishing in said parks. ...”

The 1920 Act of Acceptance reads: “Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the provisions of the act of the legislature of the State of California (approved April 15, 1919), ceding to the United States exclusive jurisdiction over the territory embraced and included within the Yosemite National Park, Sequoia National Park, and General Grant National Park respectively, are hereby accepted and sole and exclusive jurisdiction is hereby assumed by the United States over such territory, saving, however, to the said State of California, the right to serve civil or criminal process within the limits of the aforesaid parks . . . and saving further to the said State the right to tax persons and corporations, their franchises and property on the land's included in said parks, and the right to fix and collect license fees for fishing in said parks. ...”

The contention of the plaintiff is that the state, having by the 1905 act of recession, granted exclusive jurisdiction of Yosemite Valley to the United States, had nothing more to grant, and that the attempted cession of 1919 with reservations was an empty gesture. Answering this argument the defendant asserts that the 1905 act of recession did not vest exclusive jurisdiction in the United States, because, so he claims, such exclusive jurisdiction can be acquired only pursuant to clause 17, section 8, article I of the Constitution of the United States, which provides: “Congress shall have power to exercise exclusive legislation in all cases whatsoever . . . over all places purchased by the consent of the legislature of the state in which the same shall be, for the erection of forts, magazines, arsenals, dockyards, and other needful buildings. ’ ’ In this connection reliance is also placed on section 6 of article XIII of the state Constitution, providing that the power of taxation shall never be surrendered or suspended by any grant or contract to which the state shall be a party.

However, we deem it unnecessary to pursue the inquiry into the constitutional question whether exclusive jurisdiction may be ceded to or acquired' by the United States of lands within the territorial limits of a state solely for recreational and park purposes. We need note only that the history and reasons for the vesting in the United States of the power to hold exclusive jurisdiction for the enumerated purposes, and many aspects of the controversial question relating to acquisition of exclusive jurisdiction for other purposes, have been stated in the following cases, among others, and do not require repetition here: Fort Leavenworth R. R. Co. v. Lowe, 114 U. S. 525, 533 [5 Sup. Ct. 995, 29 L. Ed. 264]; Benson v. United States, 146 U. S. 325 [13 Sup. Ct. 60, 36 L. Ed. 991]; Arlington Hotel Co. v. Fant, 278 U. S. 439 [49 Sup. Ct. 227, 73 L. Ed. 447]; Surplus Trading Co. v. Cook, 281 U. S. 647 [50 Sup. Ct. 455, 74 L. Ed. 1091]; In re Kelly, 71 Fed. 545; People v. Mouse, 203 Cal. 782 [265 Pac. 944]; Silas Mason, Inc., v. State Tax Corn., 188 Wash. 98 [61 Pac. (2d) 1269], (affirmed 302 U. S. 186 [58 Sup. Ct. 233, 82 L. Ed. ----]; Ryan v. State, 188 Wash. 115 [61 Pac. (2d) 1276], (affirmed 302 U. S. 186 [58 Sup. Ct. 233, 82 L. Ed. ----].) Beginning at least as early as the decision in Fort Leavenworth R. R. Co. v. Lowe, supra, the Supreme Court of the United States recognized that exclusive jurisdiction could be acquired otherwise than by purchase with the consent of the state legislature, namely by cession, if for one or more of the purposes enumerated in the federal constitutional provision. (See Ryan v. State, supra, 61 Pac. (2d) at 1281.) But whether exclusive jurisdiction by any means may be acquired for a purpose not so enumerated may still be an open question. (See Arlington Hotel Co. v. Fant, 278 U. S. 439 [49 Sup. Ct. 227, 73 L. Ed. 447]; In re Kelly, 71 Fed. 545.) The controversial point that the United States has the constitutional power to acquire exclusive jurisdiction within state territorial limits of ail area devoted solely to park and recreational purposes was expressly left open in the Arlington Hotel ease at page 454. So far as we know only two eases have since attempted to resolve the question. In Yellowstone Park Transp. Co. v. Gallatin County, 31 Fed. (2d) 644, (petition for writ of certiorari denied, 280 U. S. 555 [50 Sup. Ct. 16, 74 L. Ed. 611]), the court upheld the exclusive jurisdiction of lands ceded to the United States by the state of Montana for park purposes. The opinion shows that no concurrent jurisdiction or taxing power was reserved and that the express grant of powers to the United States was inconsistent with the reservation of any concurrent jurisdiction. The court supported its statement that “Cessions of exclusive jurisdiction such as that made by the Legislature of Montana, have been very common in the history of this country, and their effect is well settled ’ by the single reference to the Arlington Hotel decision. The other case, Yosemite Park & Curry Co. v. Collins, 20 Fed. Supp. 1009 (Circuit Court of Appeals, Southern Div., Northern Dist. of California, No. 4165) will be later discussed.

If the legislative act of recession of 1905, the congressional acceptance thereof, and the related acts prior to that time, were alone to be considered, it might be said that the constitutional question is squarely presented for determination. But as applied to all the territory named, we have a subsequent act of the legislature ceding title to the United States and expressly reserving, among other matters, the right to exercise in the territory ceded the power to tax persons and corporations, their franchises and property, together with a congressional acceptance in the same express terms. It is not a matter of necessary judicial inquiry as to what prompted these new acts of cession and acceptance, covering public lands reserved to the United States when California was admitted as a state, and lands formerly receded to the United States without the special reservation. It may be that the respective legislative bodies deemed that, except for the purposes enumerated in clause 17, section 8 of article I of the Constitution, and in accord with the declaration of section 6, article XIII of the state Constitution, the power had not been constitutionally delegated to the United States to hold land for other purposes exclusive of any dominion of the state, and that they therefore desired to reframe their agreement to accord with the relative existing rights of the respective sovereigns. In any event, there exists no constitutional inhibition upon the power of the state to cede or the right of the United States to receive limited jurisdiction of lands for the purposes and with the reservations stated in the grant herein. The only proper function of the court, therefore, is to recognize and give effect to the act of recession of 1919 and the act of acceptance of 1920 which appear to constitute a binding and valid definition and mutual recognition of the rights and powers of the respective sovereign parties. All other related considerations fade away when it is realized that, whatever had taken place before, the taxing power of the state was reserved by the act of 1919 and that congress, by the acceptance act of 1920, recognized the continuance of that power in the state. This express recognition by both sovereigns clearly establishes the existence of the right of the state to tax' in the areas designated in accordance with the power as reserved and defined in both acts.

It is not questioned that the United States may hold limited jurisdiction of land for other than the purposes enumerated in clause 17 of section 8 of article I of the Constitution ; and the cases relied upon do not preclude a holding that the extent of such limited jurisdiction for other than the specified purposes may be the subject of change by mutual agreement between the state and the United States.

In Fort Leavenworth R. R. Co. v. Lowe, supra, at page 539, we find this statement: “It not being a ease where exclusive legislative authority is vested by the Constitution of the United States, that cession could be accompanied with such conditions as the State might see fit to annex not inconsistent with the free and effective use of the fort as a military post.” In that case the state by the act of cession of land to be used as a military post had reserved the power to tax railroad and other corporations. It was held that the reservation of the taxing power did not interfere with the use of the area as a military post and that there was no constitutional prohibition against the exercise of the reserved power. (See, also, Chicago & Pacific Ry. Co. v. McGlinn, 114 U. S. 542, 545, 546 [5 Sup. Ct. 1005, 29 L. Ed. 270]; United States v. Unzeuta, 281 U. S. 138, 142 [50 Sup. Ct. 284, 74 L. Ed. 761].) The holding in the case of United States v. Unzeuta, supra, p. 143, that ceded jurisdiction which had been accepted could not be recaptured by the action of the state alone (which sought to amend the act of cession), is consistent with our conclusions herein. So, also, is the statement in In re Ladd, 14: Fed. 31, at page 38 (wherein a state amendatory act was held to be ineffective to abrogate the existing contract, and there was no express acceptance), that a ceded exclusive jurisdiction continues until “terminated, either by the United States ceasing to own and occupy the reservation, or by the United States retroceding its exclusive jurisdiction to the state”. Nor is Standard Oil Co. v. California, 291 U. S. 242 [54 Sup. Ct. 381, 78 L. Ed. 775], in conflict. There the tax on gasoline (Stats. 1923, p. 571), was attempted to be laid on deliveries to the Post Exchange within the Presidio in San Francisco, a military reservation over which the United States was held to have been vested with exclusive jurisdiction under the constitutional section.

We conclude that the legislative act of 1919 and the congressional acceptance of 1920 operate to reserve to the state the powers stated in the respective enactments.

Another ground of resistance to the imposition of the sales and gasoline taxes in the national park areas is that such taxes, being in their nature excise taxes rather than taxes on persons or property, are not within the express reserved power.

The reserved taxing power is couched in the following language : ‘ and saving further to the said State the right to tax persons and corporations, their franchises and property on the lands included in said parks, and the right to fix and collect license fees for fishing in said parks”. It is asserted that inasmuch as a tax such as the retail sales tax or gasoline tax is in its nature an excise tax (People v. Ventura Refining Co., 204 Cal. 286, 294 [268 Pac. 347, 283 Pac. 60]; Roth Drug, Inc., v. Johnson, 13 Cal. App. (2d) 720, 730 [57 Pac. (2d) 1022]), and being neither a tax on persons, such as a poll tax, nor a tax on tangible property, the power to impose it is not within the express reservation. The plaintiff misconceives the meaning and purpose of the phraseology employed. Contrary to its contention, the rule of strict construction does not necessarily apply. The pertinent considerations are stated in Ryan v. State, supra, 61 Pac. (2d) at 1283, as follows: “But, since self-preservation is the first law of nations and states, as well as of individuals, it will not be presumed, in the absence of clearly expressed intent, that the state has relinquished its sovereignty . . . The taxing power of the state is never presumed to have been relinquished unless the language in which the surrender is made is clear and unmistakable.” And the following is also pertinent: “This is not a contest between the federal government and the state as to jurisdiction. It is a contest between the state, asserting its concurrent, or partial, jurisdiction, and an individual who asserts that exclusive jurisdiction rests in the federal government. So far from there being any contest as to jurisdiction between the two sovereign powers, the record discloses that they are working in harmony and accord, each exercising the field for which it is the better equipped and each, at the same time, recognizing the field of the other. The federal government, therefore, cannot possibly be prejudiced by the result of this action.”

So, in line with the applicable principle, the reserved power must be construed most strongly in favor of the state in order to preserve its jurisdiction as to matters with which it is directly and immediately concerned, and as to which jurisdiction has not been ceded or granted to the federal government. We find support also in Nikis v. Commonwealth, 144 Va. 618 [131 S. E. 236, 46 A. L. R 219], where it was said: “That the right of a state to tax the property of others located upon lands owned by the United States, although it cannot tax such lands, will not be held to be abandoned by the state, except for the most compelling reasons, is quite manifest from several decisions of the Supreme Court of the United States.” It may be noted that it was there held that to be accorded immunity from state taxation it must be shown not only that the land was acquired by the United States, but also that it was acquired and used for one of the purposes indicated in article I, section 8, clause 17 of the Constitution.

A consideration of the taxing statutes shows that the tax' is imposed respectively “upon retailers” (sec. 3, Stats. 1933, p. 2599, Stats. 1935, p. 1252) and upon “distributors” of gasoline, and it has so been held. {Roth Drug, Inc., v. Johnson, supra, p. 736; People v. Herhert’s of Los Angeles, Inc., 3 Cal. App. (2d) 482 [39 Pac. (2d) 829]; People v. Ventura Refining Co., supra, at page 294; Rio Grande Oil Co. v. Los Angeles, 6 Cal, App. (2d) 200, 201 [44 Pac. (2d) 451].) This language in the statutes will not, of course, be construed to disturb the classification of taxable subjects— persons, property and business (State Tax on Foreign-Held Bonds, 82 U. S. (15 Wall.) 300, 319 [21 L. Ed. 179]; 26 R C. L., p. 34; 1 Cooley on Taxation, p. 172.) Neither does it mean that the excise taxes imposed should be considered as a tax “on persons” as a subject of taxation. The language of the statutes and the decisions still leaves the sales and gasoline taxes in the category of “excises” or tax on business. Nevertheless, as stated in volume 1, Cooley on Taxation, pages 68, 69, taxes are contributions from persons or property, and “whether a tax be considered as imposed on the person or on the property, it is clear that all taxes are imposed either upon the one or the other”. It seems obvious that the language of the reservation of the taxing-power contemplated the reservation to the state of the general taxing power without any exceptions other than that necessarily arising from the ownership of the land and property by the United States government. There is no inconsistency created by the express inclusion in the reserved power of the “right to fix and collect license fees for fishing in said parks”. Because of the nature of the privilege specially singled out, its express inclusion does not necessarily indicate that the taxing of all other privileges was intended to be excluded from the reservation. On the contrary it would seem that it was deemed necessary expressly to refer to that subject-matter, -as otherwise it might be claimed that the cession carried the exclusive supervision and regulation of fishing privileges in the streams included in the ceded areas.

There is no merit in the contention that the privilege of making sales in the ceded areas emanate solely from the national government. The mere fact that the taxing power for all general purposes has been reserved by the state with the consent of congress is a recognition by the latter that the granting of such privileges emanates as well from the state.

The main contentions urged to establish the invalidity of the reserved taxing power as here exercised by the state are answered adversely to the claims in the recent ease of Rainier Nat. Park Co. v. Martin, 18 Fed. Supp. 481 (affirmed 302 U. S. 661 [58 Sup. Ct. 478, 82 L. Ed. ----]). There the power, exercised under a similar reservation, to impose on and collect a state retail sales tax' from the Rainier National Park Company was held to be valid and was sustained.

In Yosemite Park & Curry Co. v. Collins, supra, it was held that the state of California had at one time ceded exclusive jurisdiction of Yosemite Valley to the United States, that the subsequent legislation attempting to reserve the taxing power was ineffective, and therefore that the state had no reserved power to enforce in Yosemite Valley the Alcoholic Beverage Control Act (1935 Stats., chap. 330). That act was there declared to be a complete liquor control measure, including provisions for license fees and excise taxes. Relative to the balance of Yosemite park, the court held that the reservation of the taxing power did not include the power to impose a license tax. For the reasons hereinabove stated, we are led to disagree with those conclusions of the court in that case. Nor do we perceive that they were necessary to its decision. The result in that case, if it be correct, is adequately supported by the final ground stated by the court, as follows: ‘ While a revenue measure does not preclude the possibility of a clash between sovereignties, it does not invite one as a regulatory measure does. California has ceded the park to the United States, which has agreed to police it. Now by reason of the Alcoholic Beverage Control Act, California evidently claims the retention of her police power. Such a claim is violative of the police jurisdiction placed in the hands of the national government, and is void. Since the primary purpose of California’s tax measure is the regulation of the intoxicating liquor business; since such regulation constitutes an exercise of the police power which is beyond the jurisdiction of the state, the measure cannot bestow upon California the power to collect license taxes from plaintiff for the importation and sale of liquors.”

However the exercise of the reserved power by the imposition of retail sales and gasoline taxes creates no interference with the exercise of the jurisdiction acquired by the United States pursuant to the grants herein involved.

The judgment in each case is affirmed.

Rehearing denied.


text:
    [Sac. No. 5176.
    In Bank.
    February 25, 1938.]
    YOSEMITE PARK AND CURRY CO. (a Corporation), Appellant, v. CHARLES G. JOHNSON, as State Treasurer, etc., Respondent.
    Brobeck, Phleger & Harrison for Appellant.
    U. S. Webb, Attorney-General, and H. H. Linney and James J. Arditto, Deputies Attorney-General, for Respondent.
   THE COURT.

The plaintiff herein sued to recover sales taxes imposed on retail sales to visitors and others in Yosemite National Park, and paid by it under protest. A demurrer to the complaint was sustained and judgment entered for the defendant. The plaintiff appealed' from the judgment.

Most of the questions raised are answered by the decision this day filed in the case of Standard Oil Co. of California v. Johnson, Sac. Nos. 5144 and 5145, this day decided {ante, p. 758 [76 Pac. (2d) 1184]), and that decision is deemed controlling on the disposition of those questions herein.

The plaintiff is a private corporation authorized to do business in this state. It operates as United States gov-eminent lessee and concessioner in Yosemite Valley under a contract with the secretary of the interior. The additional contention herein that as such lessee and concessioner it is not subject to the reserved taxing power of the state has been answered adversely in the case of Rainier Nat. Park Co. v. Henneford, 182 Wash. 159 [45 Pac. (2d) 617] (petition for writ of certiorari denied, 296 U. S. 647 [56 Sup. Ct. 307, 80 L. Ed. 460]), In that case a similar lessee and concessioner operating in a national park was held subject to taxation by the state. (See, also, Silas Mason, Inc., v. State Tax Corn., 188 Wash. 98 [61 Pac. (2d) 1269] (affirmed 302 U. S. 186 [58 Sup. Ct. 233, 82 L. Ed. ----]), and Rainier Nat. Park Co. v. Martin, 18 Fed. Supp. 481, affirmed 302 U. S. 661 [58 Sup. Ct. 478, 82 L. Ed. ----]). We find no merit in the contention. Nor may it be said that the exercise of the reserved taxing power will hinder the Yosemite Park and Curry Company in the efficient performance of its contract with the federal government.

The judgment is affirmed.

Rehearing denied.