text:
    [S. F. No. 14879.
    In Bank.
    July 30, 1934.]
    FRANK M. DAVIS et al., Appellants, v. OLIN D. JACOBY et al., as Executors, etc., Respondents.

      Walter H. Linforth, Wm. M. Cannon and John L. McVey for Appellants.
    Marshall Rutherford, Fitzgerald, Abbott & Beardsley, Calkins, Hagar, Hall & Linforth, Goudge, Robinson & Hughes, Chapman, Trefethen, Richards & Chapman and Cormac & Bolles for Respondents.
   THE COURT.

Plaintiffs appeal from a judgment refusing to grant specific performance of an alleged contract to make a will. The facts are not in dispute and are as follows:

The plaintiff Caro M. Davis was the niece of Blanche Whitehead who was married to Rupert Whitehead. Prior to her marriage in 1913 to her coplaintiff Prank M. Davis, Caro lived for a considerable time at the home of the Whiteheads, in Piedmont, California. The Whiteheads were childless and extremely fond of Caro. The record is replete with uncontradicted testimony of the close and loving .relationship that existed between Caro and her aunt and uncle. During the period that Caro lived with the Whiteheads she was treated as and often referred to by the Whiteheads as their daughter. In 1913, when Caro was married to Prank Davis the marriage was arranged at the Whitehead home and a reception held there. After the marriage Mr. and Mrs. Davis went to Mr. Davis’ home in Canada, where they have resided ever since. During the period 1913 to 1931 Caro made many visits to the Whiteheads, several of them being of long duration. The Whiteheads visited Mr. and Mrs. Davis in Canada on several occasions. After the marriage and continuing down to 1931 the closest and most friendly relationship at all times existed between these two families. They corresponded frequently, the record being replete with letters showing the loving relationship.

By the year 1930 Mrs. Whitehead had become seriously ill. She had suffered several strokes and her mind was failing. Early in 1931 Mr. Whitehead had her removed to a private hospital. The doctors in attendance had informed him that she might die at any time or she might linger for many months. Mr. Whitehead had suffered severe financial reverses. He had had several sieges of sickness and was in poor health. The record shows that during the early part of 1931 he was desperately in need of assistance with his wife, and in his business affairs, and that he did not trust his friends in Piedmont. On March 18, 1931, he wrote to Mrs. Davis telling her of Mrs. Whitehead’s condition and added that Mrs. Whitehead was very wistful. “Today I endeavored to find out what she wanted. I finally -asked her if she wanted to see you. She burst out crying and we had great difficulty in getting her to stop. Evidently, that is what is on her mind. It is a very difficult matter to decide. If you come it will mean that you will have to leave again, and then things may be serious. I am going to see the doctor, and get his candid opinion and will then write you again. . . . Since writing the above, I have seen the doctor, and he thinks it will help considerably if you come.” Shortly thereafter, Mr. Whitehead wrote to Caro Davis further explaining the physical condition of Mrs. Whitehead and himself. On March 24, 1931, Mr. Davis, at the request of his wife, telegraphed to Mr. Whitehead as follows: “Tour letter received. Sorry to hear Blanche not so well. Hope you are feeling better yourself. If you wish Caro' to go to you can arrange for her to leave in about two weeks. Please wire me if you think it advisable for her to go.” On March 30, 1931, Mr. Whitehead wrote a long letter to Mr. Davis, in which he explained in detail the condition of Mrs. Whitehead’s health and also referred to his own health. He pointed out that he had lost a considerable portion of his cash assets but still owned considerable realty, that he needed someone to help him with his wife and some friend he could trust to help him with his business affairs and suggested that perhaps Mr. Davis might come to California. He then pointed out that all his property was community property; that under his will all the property was to go to Mrs. Whitehead; that he believed that under Mrs. Whitehead’s will practically everything was to go to Caro. Mr. Whitehead again wrote to Mr. Davis under date of April 9, 1931, pointing out how badly he needed someone he could trust to assist him, and giving it as his belief that if properly handled he could still save about $150,000. He then stated: “Having you [Mr. DavisJ here to depend on and to help. me regain my mind and courage would be’ a big thing. ’ ’ Three days later, on April 12, 1931, Mr. Whitehead again wrote, addressing his letter to “Dear Frank and Caro”, and in this letter made the definite offer, which offer it is claimed was accepted and is the basis of this action. In this letter he first pointed out that Blanche, his wife, was in a private hospital and that “she cannot last much longer . . . my affairs are not as bad as I supposed at first. Cutting everything down I figure 150,000 can be saved from the wreck.” He then enumerated the values placed upon his various properties and then continued “my trouble was caused by my friends “taking advantage of my illness and my position to skin me

“Now if Frank could come out here and be with me, and look after my affairs, we could easily save the balance I mentioned, provided I dont get into another panic and do some more foolish things.

“The next attack will be my end, I am 65 and my health has been bad for years, so, the Drs. dont give me much longer to live. So if you can come, Caro will inherit everything and you will make our lives happier and see Blanche is provided for to the end

“My eyesight has gone back on me, I cant read only for a few lines at a time. I am at the house alone with Stanley [the chauffeur] who does everything for me and is a fine fellow. Now, what I want is some one who will take charge of my affairs and see I dont lose any more. Frank can do it, if he will and cut out the booze.

“Will you let me hear from you as soon as possible, I know it will be a sacrifice but times are still bad and likely to be, so by settling down you can help me and Blanche and gain in the end. If I had you here my mind would get better and my courage return, and we could work things out.”

This letter was received by Mr. Davis at his office in Windsor, Canada, about 9:30 A. M. April 14, 1931. After reading the letter to Mrs. Davis over the telephone, and after getting her belief that they must go to California, Mr. Davis immediately wrote Mr. Whitehead a letter, which, after reading it to his wife, he sent by air mail. This letter was lost, but there is no doubt that it was sent by Davis and received by Whitehead, in fact the trial court expressly so found. Mr. Davis testified in substance as to the contents of this letter. After acknowledging receipt of the letter of April 12, 1931, Mr. Davis unequivocally stated that he and Mrs. Davis accepted the proposition of Mr. Whitehead and both would leave Windsor to go to him on April 25th. This letter of acceptance also contained the information that the reason they could not leave prior to April 25th was that Mr. Davis had to appear in court on April 22d as one of the executors of his mother’s estate. The testimony is uncontradicted and ample to support the trial court’s finding that this letter was sent by Davis and received by Whitehead. In fact under date of April 15, 1931, Mr. Whitehead again wrote to Mr. Davis and stated “Your letter by air mail received this a. m. Now, I am wondering if I have put you to unnecessary trouble and expense, if you are making any money dont leave it, as things are bad here. ... You know your business and I dont and I am half crazy in the bargain, but I dont want to hurt you or Caro

“Then on the other hand if I could get some one to trust and keep me straight I can save a good deal, about what I told you in my former letter.”

This letter was received by Mr. Davis on April 17, 1931, and the same day Mr. Davis telegraphed to Mr. Whitehead “Cheer up—we will soon be there, we will wire you from the train.”

Between April 14, 1931, the date the letter of acceptance was sent by Mr. Davis, and April 22d, Mr. Davis was engaged in closing out his business affairs, and Mrs. Davis in closing up their home and in making other arrangements to leave. On April 22, 1931, Mr. Whitehead committed suicide. Mr. and Mrs. Davis were immediately notified and they at once came to California. From almost the moment of her arrival Mrs. Davis devoted herself to the care and comfort of her aunt, and gave her aunt constant attention and care until Mrs. Whitehead’s death on May 30, 1931. On this point the trial court found: “from the time of their arrival in Piedmont, Caro M. Davis administered in every way to the comforts of Blanche Whitehead and saw that she was cared for and provided for down to the time of the death of Blanche Whitehead on May 30, 1931; during said time Caro M. Davis nursed Blanche Whitehead, cared for her and administered to her wants as a natural daughter would have done toward and for her mother”.

This finding is supported by uncontradicted evidence and in fact is conceded by respondents to be correct. In fact the record shows that after their arrival in California Mr. and Mrs. Davis fully performed their side of the agreement.

After the death of Mrs. Whitehéad, for the first time it was discovered that the information contained in Mr. Whitehead ’s letter of March 30, 1931, in reference to the contents of his and Mrs. Whitehead’s wills was incorrect. By a duly witnessed will dated February 28, 1931, Mr. Whitehead, after making several specific bequests, had bequeathed all of the balance of his estate to his wife for life, and upon her death to respondents Geoff Doubble and Rupert Ross Whitehead, his nephews. Neither appellant was mentioned in his will. It was also discovered that Mrs. Whitehead by a will dated December 17, 1927, had devised all of her estate to her husband. The evidence is clear and uncontradicted that the relationship existing between Whitehead and his two nephews, respondents herein, was not nearly as close and confidential as that existing between Whitehead and appellants.

After the discovery of the manner in which the property had been devised was made, this action was commenced upon the theory that Rupert Whitehead had assumed a contractual obligation to make a will whereby “Caro Davis would inherit everything”; that he had failed to do so; that plaintiffs had fully performed their part of the contract; that damages being insufficient, quasi specific performance should be granted in order to remedy the alleged wrong, upon the equitable principle that equity regards that done which ought to have been done. The requested relief is that the beneficiaries under the will of Rupert Whitehead, respondents herein, be declared to be involuntary trustees for plaintiffs of Whitehead’s estate.

It should also be added that the evidence shows that as a result of Frank Davis leaving his business in Canada he forfeited not only all insurance business he might have written if he had remained, but also forfeited all renewal commissions earned on past business.. According to his testimony this loss was over $8,000.

The trial court found that the relationship between Mr. and Mrs. Davis and the Whiteheads was substantially as above recounted and that the other facts above stated were true; that prior to April 12, 1931, Rupert Whitehead had suffered business reverses and was depressed in mind and ill in body; that his wife was very ill; that because of his mental condition he “was unable to properly care for or look after his property or affairs ’ ’; that on April 12, 1931, Rupert Whitehead in writing made an offer to plaintiffs that, if within a reasonable time thereafter plaintiffs would leave and abandon their said home in Windsor, and if Frank M. Davis would abandon or dispose of his said business, and if both the plaintiffs would come to Piedmont in the said county of Alameda where Rupert "Whitehead then resided and thereafter reside at said place and be with or near him, and, if Prank M. Davis would thereupon and thereafter look after the business and affairs of said Rupert Whitehead until his condition improved to such an extent as to permit him so to do, and if the plaintiffs would look after and administer to the comforts of Blanche Whitehead and see that she was properly cared for until the time of her death, that, in consideration thereof, Caro M. Davis would inherit everything that Rupert Whitehead possessed at the time of his death and that by last will and testament Rupert Whitehead would devise and bequeath to Caro M. Davis all property and estate owned by him at the time of his death, other than the property constituting the community interest of Blanche Whitehead; thatshortiy prior to April 12, 1931, Rupert Whitehead informed plaintiffs of the supposed terms of his will and the will of Mrs. Whitehead. The court then finds that the offer of April 12th was not accepted. As already stated, the court found that plaintiffs sent a letter to Rupert Whitehead on April 14th purporting to accept the offer of April 12th, and also found that this letter was received by the Whiteheads, but finds that in fact such letter was not a legal acceptance. The court also found that the offer of April 12th was “fair and just and reasonable, and the consideration therefor, namely, the performance by plaintiffs of the terms and conditions thereof, if the same had been performed, would have been an adequate consideration for said offer and for the agreement that would have resulted from such performance; said offer was not, and said agreement would not have been, either harsh or oppressive or unjust to the heirs at law, or devisees, or legatees, of Rupert Whitehead, or to each or any of them, or otherwise”.

The court also found that plaintiffs did not know that the statements made by Whitehead in reference to the wills were not correct until after Mrs. Whitehead’s death, that after plaintiffs arrived in Piedmont they cared for Mrs. Whitehead until her death and “Blanche Whitehead was greatly comforted by the presence, companionship and association of Caro M. Davis, and by her administering to her wants”.

The theory of the trial court and of respondents on this appeal is that the letter of April 12th was- an offer to contract, but that such offer could only be accepted by performance and could not be accepted by a promise to perform, and that said offer was revoked by the death of Mr. Whitehead before performance. In other words, it is contended that the offer was an offer to enter into a unilateral contract, and that the purported acceptance of April 14th was of no legal effect.

The distinction between unilateral and bilateral contracts is well settled in the law. It is well stated in section 12 of the American Institute’s Restatement of the Law of Contracts as follows:

“A unilateral contract is one in which no promisor receives a promise as consideration for his promise. A bilateral contract is one in which there are mutual promises between two parties to the contract; each party being both a promisor and a promisee.”

This definition is in accord with the law of California. (Christman v. Southern Cal. Edison Co., 83 Cal. App. 249 [256 Pac. 618].)

In the ease of unilateral contracts no notice of acceptance by performance is required. Section 1584 of the Civil Code provides, “Performance of the conditions of a proposal, ... is an acceptance of the proposal.” (See Cuthill v. Peabody, 19 Cal. App. 304 [125 Pac. 926]; Los Angeles Traction Co. v. Wilshire, 135 Cal. 654 [67 Pac. 1086].)

Although the legal distinction between unilateral and bilateral contracts is thus well settled, the difficulty in any particular case is to determine whether the particular offer is one to enter into a bilateral or unilateral contract. Some cases are quite clear cut. Thus an offer to sell which is accepted is clearly a bilateral contract, while an offer of a reward is a clear-cut offer of a unilateral contract which cannot be accepted by a promise to perform, but only by performance. (Berthiaume v. Doe, 22 Cal. App. 78 [133 Pac. 515].) Between these two' extremes is a vague field where the particular contract may be unilateral or bilateral depending upon the intent of the offerer and the facts and circumstances of each case. The offer to contract involved in this case falls within this category. By the provisions of the Restatement of the Law of Contracts it is expressly provided that there is a presumption that the offer is to enter into a bilateral contract. Section 31 provides:

“In case of doubt it is presumed that an offer invites the formation of a bilateral contract by an acceptance amounting in effect to a promise by the offeree to perform what the offer requests, rather than the formation of one or more unilateral contracts by actual performance on the part of the offeree.”

Professor Williston in his Treatise on Contracts, volume 1, section 60, also takes the position that a presumption in favor of bilateral contracts exists.

In the comment following section 31 of the Restatement the reason for such presumption is stated as follows:

“It is not always easy to determine whether an offerer requests an act or a promise to do the act. As a bilateral contract immediately and fully protects both parties, the interpretation is favored that a bilateral contract is proposed.”

While the California cases have never expressly held that a presumption in favor of bilateral contracts exists, the cases clearly indicate a tendency to treat offers as offers of bilateral rather than of unilateral contracts. (Roth v. Moeller, 185 Cal. 415 [197 Pac. 62]; Boehm v. Spreckels, 183 Cal. 239 [191 Pac. 5]; see, also, Wood v. Lucy, Lady Duff-Gordon, 222 N. Y. 88 [118 N. E. 214].)

Keeping these principles in mind we are of the opinion that the offer of April 12th was an offer to enter into a bilateral as distinguished from a unilateral contract. Respondents argue that Mr. Whitehead had the right as offerer to designate his offer as either unilateral or bilateral. That is undoubtedly the law. It is then argued that from all the facts and circumstances it must be implied that what Whitehead wanted was performance and not a mere promise to perform. We think this is a non sequitur, in fact the surrounding circumstances lead to just the opposite conclusion. These parties were not dealing at arm’s length. Not only were they related, but a very close and intimate friendship existed between them. The record indisputably demonstrates that Mr. Whitehead had confidence in Mr. and Mrs. Davis, in fact that he had lost all confidence in everyone else. The record amply shows that by an accumulation of occurrences Mr. Whitehead had become desperate, and that what he wanted was the promise of appellants that he could look to them for assistance. He knew from his past relationship with appellants that if they gave their promise to perform he could rely upon them. The correspondence between them indicates how desperately he desired this assurance. Under these circumstances he wrote his offer of April 12th, above quoted, in which he stated, after disclosing his desperate mental and phjosical condition, and after setting forth the terms of his offer: “Will you let me hear from you as soon as possible—I know it will be a sacrifice but times are still bad and likely to be, so by settling down you can help me and Blanche and gain in the end.” By thus specifically requesting an immediate reply Whitehead expressly indicated the nature of the acceptance desired by him—namely, appellants’ promise that they would come to California and do the things requested by him. This promise was immediately sent by appellants upon receipt of the offer, and was received by Whitehead. It is elementary that when an offer has indicated the mode and means of acceptance, an acceptance in accordance with that mode or means is binding on the offerer.

Another factor which indicates that Whitehead must have contemplated a bilateral rather than a unilateral contract, is that the contract required Mr. and Mrs. Davis to perform services until the death of both Mr. and Mrs. Whitehead. It is obvious that if Mr. Whitehead died first some of these services were to be performed after his death, so that he would have to rely on the promise of appellants to perform these services. It is also of some evidentiary force that Whitehead received the letter of acceptance and acquiesced in that means of acceptance.

Shaw v. King, 63 Cal. App. 18 [218 Pac. 50], relied on by respondents is clearly not in point. In that case there was no written acceptance, nor was there an acceptance by partial or total performance.

For the foregoing reasons we are of the opinion that the offer of April 12, 1931, was an offer to enter into a bilateral contract which was accepted by the letter of April 14, 1931. Subsequently appellants fully performed their part of the contract. Under such circumstances it is well settled that damages are insufficient and specific performance will be granted. (Wolf v. Donahue, 206 Cal. 213 [273 Pac. 547].) Since the consideration has been fully rendered by appellants the question as to mutuality of remedy becomes of no importance. (6 Cal. Jur., sec. 140.)

Respondents also contend the complaint definitely binds appellants to the theory of a unilateral contract. This contention is without merit. The complaint expressly alleges the parties entered into a contract. It is true that the complaint also alleged that the contract became effective by performance. However, this is an action in equity. Respondents were not misiva. No objection was made to the testimony offered to show the acceptance of April 14th. A fair reading of the record clearly indicates the case was tried by the parties ojL the theory that the sole question was whether there was a contract—unilateral or bilateral.

For the foregoing reasons the judgment appealed from is reversed.

Rehearing denied.


source: Caselaw Access Project

author: THE COURT.

license: Public Domain

text:
    [Sac. No. 4840.
    In Bank.
    July 30, 1934.]
    HELEN GRIFFITH, Petitioner, v. THE SUPERIOR COURT OF MENDOCINO COUNTY et al., Respondents.

      Charles Kasch for Petitioner.
    Taft & Spurr for Respondents.
   THE COURT.

A hearing was granted in this case after decision by the District Court of Appeal, Third Appellate District. Upon further consideration, we are satisfied with the determination thereof by the said court, and we hereby adopt the following portions of the opinion of Mr. Presiding Justice Pullen as part of the opinion of this court. It reads as follows:

“Petitioner herein seeks by this writ to review an order of the Superior Court modifying the terms of an interlocutory decree of divorce.
“Pending the divorce trial the parties entered into an agreement for a settlement of their property rights. This agreement, among other provisions, contained the following:
“ ‘It is mutually agreed between the parties hereto that the wife in consideration of the premises and in consideration of the payment to her of $75.00, and $20.00 per month as hereinafter set forth, does by these presents, grant and convey unto the husband all the right, title and interest in and to all property now owned by the said husband and wife as community property; and in consideration for such release and conveyance by the said wife the said husband agrees to pay to the wife the sum of $75.00 plus the further sum of $20.00 per month in advance on the 10th. day of each calendar month commencing with the date hereof, and the wife hereby acknowledges receipt of the payment of said sum of $75.00, together with the further sum of $80.00 for said monthly payments otherwise due on the 10th. days of July, August, September and October, 1930.’ And,
“ ‘It is further agreed that in the event of the remarriage or death of the wife, that the aforesaid monthly payments of $20.00 shall terminate as of the date of such remarriage or death.’
“Upon her part the wife released the husband from any debts or liabilities owing by each to the other except the payments above set forth; release any right, interest or title as heir at law or otherwise to any property of the husband and waived any claim to contest or oppose the will of the husband or right to homestead allowance, and agreed that in any divorce proceedings pending or hereafter to be brought she would not have the right to recover costs, counsel fees, alimony, support or maintenance, thereby waiving all claims thereto and any claim for future maintenance or support, the agreement being intended as a complete adjustment of all property rights.
“At the trial the defendant failed to appear and his default was entered. Judgment was ordered for plaintiff and the following was entered in the minutes of the court:
“ ‘An interlocutory decree of divorce was granted plaintiff, property agreement confirmed. Plaintiff was awarded $20.00 per month for support beginning August 1, 1930, until the further order of the court.’
“Subsequently a formal decree was signed by the court and filed in the records thereof, which decree embodied in full the agreement hereinbefore referred to between the parties, but made no reference to an allowance until further order of the court, as appeared in the minutes above.
“A final decree was entered at the expiration of one year, which by reference, adopted the terms of the interlocutory decree. Defendant continued to make payments of $20 monthly as provided in the agreement, but in May, 1933, moved the respondent court to modify the interlocutory decree by reducing the amount of $20 per month allowed therein as permanent support and maintenance, to nothing. This motion was based upon the terms of the minute order, which, as will be noted, provided that payments should continue until terminated by order of court. Upon the hearing thereof the motion was granted, and petitioner being dissatisfied, seeks here to review the order so made, contending that the formal decree submitted to the court and signed by the judge was the order of the court, and that the time had expired within which defendant could move to modify the same.”

The lower court in the present proceeding found that the minute order in the divorce proceeding correctly stated the order of the court, in which alimony was awarded, subject to modification by the court. The interlocutory decree as signed omitted the provision that the payments were to be “until the further order of the court”, and this omission was found to be a result of clerical misprision. The interlocutory decree was therefore corrected to state the decision of the court as actually rendered. No attack is made upon this conclusion of the lower court with respect ■to the sufficiency of the evidence to support it, and we think that in view of the minute order, it was proper for the lower court to conclude that the interlocutory decree did not purport to order the payment of alimony without any power of modification.

It therefore follows that the court, in accordance with its statutory power, could modify the order for the payment of alimony by ordering the reduction or cessation of payments provided thereunder, and that the exercise of the power in this case was within its jurisdiction. The court could not, of course, and did not attempt to change the terms of the agreement previously entered into and approved by the court in the divorce proceeding, and the terms of that agreement are still binding between the parties, and may be the subject of a civil action for its enforcement.

The order is affirmed.


author: CURTIS, J.

text:
    [S. F. No. 15090.
    In Bank.
    July 30, 1934.]
    A. DON DUNCAN, Appellant, v. STANDARD ACCIDENT INSURANCE COMPANY (a Corporation), Respondent.

      A. Don Duncan, in pro. per., and Percy A. Smith for Appellant.
    Myrick & Deering and Scott and Jas. J. Harrington for Respondent.
    Everett W. Mattoon, Comity Counsel (Los Angeles County), and J. F. Moroney, Deputy County Counsel, as Amici Curiae on Behalf of Appellant.
   CURTIS, J.

The Dunn-Williams Company, a copartnership consisting of W. F. Dunn and J. A. Williams and one John A. Cleeak, the original plaintiffs in this action, had claims against the defendant based upon two written undertakings executed by the defendant in an action in which said three original plaintiffs were parties. They instituted this action to recover on said undertakings. Thereafter and before judgment said John A. Cleeak assigned all his interest in said claims to his two coplaintiffs. A default judgment was subsequently rendered against the defendant in this action which was set aside by the trial court, and the plaintiffs appealed. Pending the appeal, the said John A. Cleeak assigned to his two coplaintiffs all his interest in and to said judgment. The District Court of Appeal reversed the order setting aside the default judgment. Thereafter and before the return of the remittitur, Mrs. Nancy B. Fitzgerald, a judgment creditor and the former wife of said John A. Cleeak, had an execution issued upon a judgment in her favor and against said John A. Cleeak, and placed in the hands of the sheriff who levied upon the defendant in an attempt to garnishee any money in the defendant’s possession belonging to said John A. Cleeak. Immediately thereafter the Dunn-Williams Company served upon the sheriff a third-party claim. The next day they assigned their judgment to the plaintiff in this action and he was substituted" as plaintiff herein in the place of the Dunn-Williams Company. Plaintiff thereupon served a third-party claim upon the sheriff claiming to be the sole owner of said judgment and entitled to the money due thereunder. The sheriff, after the service of these third-party claims, notified Nancy B. Fitzgerald, the said judgment creditor, of the service upon him of said third-party claims, and demanded in writing that said judgment creditor indemnify or secure him by the execution of the undertaking provided for by the terms of section 689 of the Code of Civil Procedure. The said Nancy B. Fitzgerald neglected and refused to comply with said demand, whereupon the sheriff returned to defendant the money paid to him by the defendant and notified the defendant that the same was released from the levy of said execution and returned said execution. The defendant retained said check of the sheriff for a period of fifteen days, and then returned said check to the sheriff. Thereupon defendant upon notice to the plaintiff moved the court for a satisfaction of said judgment, which motion was granted, and the plaintiff has taken an appeal from the order granting said motion, and the same is now before us for decision.

Upon the hearing of said motion the court sustained an objection to plaintiff’s offer in evidence of the two third-party claims above referred to. In support of the action of the trial court in denying admission in evidence of said third-party claim, the respondent contends that said claims were not, nor was either of them, verified by the oath of the claimant as required by section 689 of the Code of Civil Procedure, but were merely acknowledged before a notary public. The claims are before us, and an inspection of them shows the fallacy of this contention of respondent. It is true that the form of verification used by the claimants is not that usually employed in the verification of pleadings. However, it has none of the characteristics of an acknowledgment. The claims themselves are in the form of affidavits, each of them beginning after the name of the affiant with the words, “being first duly sworn, deposes and says”. The facts upon which the claim is based are then set forth in a proper and sufficient statement. Each claim bears the signature of the affiant, followed by the jurat of the notary public, duty signed by such officer. The section of the code above referred to prescribes no set form either of the claim or of its verification. The claims were in due form and should have been admitted in evidence, if material. (McCaffey Canning Co. v. Bank of America, 109 Cal. App. 415, 420 [294 Pac. 45].)

We will now proceed to a discussion of the materiality of said claims. It was the appellant’s contention that the money garnisheed by the sheriff had been released by him by reason of these third-party claims and the judgment creditor’s failure to furnish the undertaking required by said section 689. The claims therefore were necessary links in the chain of appellant’s evidence. In our opinion, they were material evidence in the proceeding before the court, and respondent’s objection to their admission should have been overruled.

Respondent contends, however, that notwithstanding the refusal of the trial court to admit these claims in evidence, it is entitled to have said judgment satisfied for the reason that it had paid said judgment in full. In other words, the respondent claims that it paid to the sheriff under a valid execution against one of the judgment creditors, John A. Clecak, the full amount of the judgment in this action without any notice or knowledge that Clecak had assigned his interest in said judgment to his eoplaintiffs, or to any other person, and therefore respondent was entitled to have said judgment satisfied of record. Appellant claims that defendant through its attorney had ■ knowledge and notice that Clecak had no interest in said judgment and that said judgment was in its entirety owned by his coplaintiffs. We will not, however, discuss that phase of the case nor rest in any manner our decision thereon. While respondent did in the first instance pay to the sheriff the amount of said judgment under an execution against John A. Clecak alone, yet the record conclusively shows that the sheriff returned the money paid him by the defendant, and notified the defendant that the property levied upon had been released. In this proceeding the sheriff acted in strict compliance with the terms of section 689 of the Code of Civil Procedure, which provides that when property levied upon is claimed by a third party the sheriff must release the property if the judgment creditor, after notice and demand, fails to give to the sheriff an undertaking with two good and sufficient sureties in double the value of the property levied on. The property having been released from the levy of said execution, and the money collected thereon having been returned to the respondent with written notice of such release, the respondent was restored to the condition in which it was before the levy upon it of said execution. The judgment against it was still unpaid. Some question is raised by respondent as to the repayment of said money to it by the check of the sheriff. No objection was made at the time said check was received by respondent, or at any other time, to the sheriff’s check, or to the payment by means of said check. No claim is made that said check would not have been paid in full had respondent presented it for payment to the bank on which it was drawn. Respondent, therefore, waived any objection which it might have had to accepting said check, by its failure to make an objection at the time it received the check, or at a reasonable time thereafter. (Sec. 1501, Civ. Code; Stevens v. Hines, 63 Cal. App. 80, 84 [218 Pac. 57]; Conde v. Dreisam Gold Min. Co., 3 Cal. App. 583, 588 [86 Pac. 825]; Western Pacific Land Co. v. Wilson, 19 Cal. App. 338, 343 [125 Pac. 1076].)

No claim is made by respondent that the judgment was paid by it when it returned to the sheriff his check some fifteen days after its receipt by the respondent. This return of the check to the sheriff could not have the effect of satisfying the judgment for two reasons. In the first place, after its receipt of said check and before the return of said check to the sheriff, the plaintiff served upon respondent notice of the assignment of the judgment herein to .the plaintiff and that John A. Clecak had no interest in said judgment or any money due thereon. After the receipt of such notice by the respondent, any attempt to pay the money due on said judgment to any person other that the plaintiff would be at the peril and risk of the respondent. In the second place, the sheriff had returned the execution against John A. Clecak, and at the time said check was returned to him, the sheriff had no execution which would authorize him to receive said check, or to take possession of any other property in satisfaction of the judgment in the action out of which the execution issued. The power and authority of the sheriff under said execution terminated with the return of said execution to the office of the clerk issuing the same.

Finally respondent contends that appellant is bound by the decision of the trial court in a mandamus proceeding instituted by Mrs. Fitzgerald against said sheriff, in which the court directed said sheriff to pay over to Mrs. Fitzgerald the money in his hands collected pursuant to the levy of execution against respondent. While it is true that the plaintiff did act as one of the attorneys for the sheriff in said action, it further appears that he was substituted out of the case before the judgment therein became final. The record fails to show that plaintiff had any right to control or direct the defense in the mandamus action, and unless he had practical control of the whole case on the part of the sheriff he is not estopped by the judgment in said action.

“The mere fact that a third person took part in the conduct of a case or in the trial or hearing through an agent or attorney in fact, or through counsel is not generally enough to connect him with the litigation in such manner as to make the judgment an estoppel against him, unless his interference amounted to assuming practical control of the whole prosecution or defense of the action.” (34 Cor. Jur., sec. 1429, p. 1009.) To the same effect is Freeman on Judgments, fifth edition, volume 1, page 943. Plaintiff, therefore, is not estopped by the judgment in the mandamus action from prosecuting his appeal in this case, or from asserting his rights to the judgment in this case.

From the foregoing we are firmly of the conclusion that had the trial court admitted in evidence the two third-party claims, as in our opinion it should have done, the appellant would have made out a conclusive defense to respondent’s motion to satisfy said judgment. With these two third-party claims before the trial court, in addition to the other evidence admitted on said hearing, appellant’s proof would have shown that the money which it claims it paid in satisfaction of the judgment herein had been returned to it, and was not applied on the satisfaction of said judgment or any part, thereof. Its motion, therefore, should have been denied. This disposition of the matter ipay result in the double payment of the judgment by the respondent. If it has that effect, the respondent has only itself to blame for the predicament in which it now finds itself. It had every opportunity to protect itself by cashing the sheriff’s check and awaiting further proceedings under the judgment in this case. Instead of taking such action, it deliberately, and after receiving notice that plaintiff claimed to be the owner of said judgment, returned said check to the sheriff with the statement that the judgment had been satisfied “as far as the Standard Accident Insurance Company was concerned”. In this conclusion, we cannot agree.

The order satisfying said judgment is reversed.

Preston, J., Langdon, J., Shenk, J., and Waste, C. J., concurred.


text:
    [Crim. No. 3733.
    In Bank.
    July 30, 1934.]
    THE PEOPLE, Respondent, v. O. J. TWEDT, Appellant.

      Thomas F. Lopez and G. W. Cartwright for Appellant.
    U. S. Webb, Attorney-General, and Seibert L. Sefton, Deputy Attorney-General, for Respondent.
   THE COURT.

A hearing was granted in this case after decision by the District Court of Appeal, Fourth Appellate District. Upon further consideration, we hereby adopt the following portions of the opinion of Mr. Justice Marks as part of the opinion of this court:

“Appellant was charged by an information filed by the district attorney of Fresno county on May 19, 1933, with three separate offenses consisting of violations of the Corporate Securities Act. The first count alleges that on or about the 20th day of May, 1930, in Fresno county, he offered for sale, to Eveline Kloster, securities of the Linda Mineral Products Company without having a permit from the commissioner of corporations. The second count alleges that at the same time and place he negotiated for the sale of securities of the same company with Eveline Kloster without any such permit. The third count alleges that at the same time and place he sold securities of the same company to Eveline Kloster without the necessary permit. It is further alleged in the information ‘that the offenses set out in the three counts of this information are different offenses arising out of the same transaction and connected in their commission’. Appellant was found guilty on all three counts and was sentenced on each of them to confinement in the state penitentiary. His motions for new trial and for arrest of judgment were denied. He is here on appeal from the judgment and orders denying'his motions.

“The Linda Mineral Products Company is a California corporation. On September 17, 1928, it was granted a permit to sell certain of its capital stock. This permit was suspended on January 4, 1930. An amended permit was issued to it on May 21, 1930. It is admitted by counsel for both parties that the only criminal acts which may be considered here in support of the judgment are those which were committed on May 19, and May 20, 1930, as the statute of limitations had run against all prior acts and the permit of the commissioner of corporations became effective on May 21, 1930, so that offering for sale, negotiating for the sale of, or selling the stock of the Linda Mineral Products Company was lawful on and after that date.

“Miss Kloster, who was a teacher in the Fresno High School, had a brother who had become acquainted with a sister of appellant while attending a university. At the request of her brother, Miss Kloster called upon Miss Twedt and her mother at their residence in Los Angeles during the Christmas holidays of 1929. She there met appellant and heard him recount in the most glowing terms the prospects for the financial success of the Linda Mineral Products Company, of which he was president. In 1930 Miss Kloster called upon Miss Twedt and her mother at their home in Oakland during the Easter school vacation of that year. She did not then see appellant.

“About May 2, 1930, while Miss Kloster was teaching her class in Fresno she was called by appellant over a long-distance telephone, probably from San Francisco. He told her that the Linda Mineral Products Company had been suddenly disappointed in raising $5,000 from another party; that it was financially embarrassed because of the failure to receive this money and that it needed it badly. He asked her to purchase stock in the company to this amount. She replied that she did not have the money. He then asked her if the members of her family could not make up the amount as he did not want to place the stock in small amounts with a number of purchasers. The conversation ended by appellant asking Miss Kloster to think it over. She sent him a night letter on the same evening, the contents of which are not in the record.

“About May 6, 1930, Miss Kloster received a telegram from appellant advising her that he would arrive in Fresno at 10 o’clock that evening and asking to see her. Appellant had a long conference with Miss Kloster and one of her sisters that evening when the prospects of the company and the sale of its stock were discussed in considerable detail. Miss Kloster. informed him that she might buy $700 worth of the stock, one of her sisters $300 and a Miss Smith $500. Appellant still wanted to sell $5,000 worth in a single transaction and again asked that the matter be further considered.

“About May 13, Miss Kloster received another telegram from appellant asking for another appointment with her in Fresno at 10 o’clock that night. He then informed Miss Kloster that he had decided to let the three women have the $1,500 worth of stock and wanted the check immediately. Miss Kloster informed him that her money was not immediately available; that she hoped to be able to get it together so that it might be sent by the 20th of May. He suggested a postdated check, but it was not given him. On Saturday, May 17, 1930, Miss Kloster sent appellant a special delivery letter to his Oakland residence address which he received the next day, the contents of which appellant described as follows: ‘She said she had talked to Dorothy Smith the next morning and that Dorothy and I agreed, was very happy to put in $500, and that—so if it was all right with me, why then she would take $500 worth of stock. . . . Oh, yes, she was going to take,—she and her sister had agreed, decided to take the stock, and also that if it was all right, why that they would take that, and also Dorothy Smith would take it. . . . She said that she did— that she would send the money, that they had decided to take the stock, and that she was going to send the money on Tuesday, as I recall it. Q. She said—do you recall whether there was any mention as to the amount of money ? A. Yes, there was. They were taking $1500 worth. ’

“Appellant replied to this letter by one dated May 18, 1930, and which was postmarked at Oakland, California, May 19, 1930, at 12:30 p. m. This letter contains the following: Sending the “Proceeds” on Tues. as you state is perfectly alright. It would have been O. K. to have sent the check because I would have held it till you told me it was good but is it just as O. K.’ ‘Tuesday’ was May 20, 1930. On the afternoon of that day Miss Kloster and Miss Smith enclosed two checks in an envelope, one signed by the former for $1,000, and one signed by the latter for $500, in payment of the stock, and mailed them in Fresno. They were received and cashed the next day in San Francisco. The stock was issued and delivered in June, 1930.

“Our study of the evidence leads to the following conclusions : 1. On May 2, 1930, appellant, over the telephone, offered to sell Miss Kloster $5,000 worth of the stock of the Linda Mineral Products Company. This offer was rejected. 2. On May 6, 1930, in Fresno, appellant renewed the offer to sell the same amount of stock to Miss Kloster. She rejected this offer, but did discuss with him the purchase of $1,500 worth of stock, $700 for herself, $300 for her sister, and $500 for Miss Smith. Appellant did not accept this offer of purchase, if it could be so termed, and left asking Miss Kloster to think the matter over further. 3. On May 13, 1930, appellant, in Fresno, offered to sell Miss Kloster $1,500 worth of the stock of the corporation if the purchase price was paid in cash, or if a post-dated check was given him for it. This offer was rejected as Miss Kloster did not have the cash available and would not give him a post-dated check. 4. By her letter of May 17th, 1930, Miss Kloster offered to purchase $1,500 worth of the stock, provided she could pay for it on May 20, 1930. This offer was accepted by appellant in his letter dated May 18, 1930, postmarked May 19, 1930. 5. The checks in payment of the stock were mailed May 20, 1930, cashed on May 21, 1930, and the stock issued in June, 1930.

“The provisions of the Civil Code in effect at the time of the transaction provided that ‘an agreement for sale is ... a mutual agreement to sell and buy’. (Sec. 1726.) ‘An agreement to sell and buy is a contract by which one engages, to transfer the title to a certain thing to another, who engages to accept the same from him and to pay a price-therefor. ’ (Sec. 1729.)

“ It is evident -that the conversations between appellant and Miss ICluster on the second, sixth, and the thirteenth days of May did not result in any contract of sale, but in rejections of the offers to sell by Miss Kloster. 'A communication from the offeree to the offeror, stating in effect that the offeree declines to accept the offer is a rejection.’ ‘A counter-offer by the offeree, relating to the same matter as the original offer, is a rejection of the original offer, unless the offeror in his offer, or the offeree in the counteroffer states that in spite of the counter-offer the original offer shall not be terminated.’ (Eestatement of the Law. Contracts, sees. 37, 38.)

“The first time the minds of the parties met on the transaction was in the exchange of the letters dated May 17, and May 18, 1930. There arose from these letters an agreement to buy and sell. It makes no difference here that the acceptance was mailed in Alameda county and the case tried in Fresno county. Where a public offense is committed, part in one county and part in another, the jurisdiction of the case is in either county. (Sec. 781, Pen. Code; United States v. Ford, 3 Fed. (2d) 643-647; People v. Boggess, 194 Cal. 212 [228 Pac. 448]; People v. Bocchio, 80 Cal. App. 138 [251 Pac. 672].)

“In 6 California Jurisprudence, 57, it is said: ‘When the parties to a proposed contract have themselves fixed the manner in which their assent is to be manifested, assent in any other mode will not be presumed. But where no condition is provided by the proposer concerning the communication of the acceptance, any reasonable and usual mode may be adopted, and consent will be deemed to have been fully communicated between the parties as soon as the acceptance is put in the course of transmission, and beyond the control of the party accepting. A telegram accepting an offer takes effect on its deposit for transmission. And it seems to be settled that when the proposal is unconditionally accepted by a letter deposited in the mail properly addressed to the proposer the contract is complete.’

“ Subdivision 8 of section 2 of the Corporate Securities Act in effect at the time of the transaction here involved provided in part as follows: ‘ “Sale” or “sell” shall include every disposition, or attempt to dispose, of a security or interest in a security for value. . . . “Sale” or “sell” shall also include a contract of sale, an exchange, an attempt to sell, an option of sale, a solicitation of a sale, a subscription or an offer to sell, directly or by an agent, or a circular letter, advertisement or otherwise. ’ (Stats. 1929, p. 1251.)

“It is evident under this definition that an offer to sell stock must be included in the sale where one is made to the offeree. It is also difficult to understand how a sale can be completed without negotiations for it. It has long been the rule in California ‘that cooperative acts constituting but one offense when committed by the same person at the same time, when combined, charge but one crime and but one punishment can be inflicted as one offense. “Where a statute makes two or more distinct acts connected with the same transaction indictable, each one of which may be considered as representing a stage in the same offense, it has in many cases been ruled they may be coupled in one count. Thus, setting up a gaming table, it has been said, may be an entire offense; keeping a gaming table and inducing others to bet upon it, may also constitute a distinct offense; for either, unconnected with the other, an indictment will lie. Yet when both are perpetrated by the same person, at the same time, they constitute but one offense, for which one count is sufficient, and for which but one penalty can be inflicted.” (Wharton on Criminal Law. Approved in People v. Shotwell, 27 Cal. 394.) ’ (People v. Clemett, 208 Cal. 142 [280 Pac. 681].) See, also, People v. Buchanan, 106 Cal. App. (Supp.) 765 [288 Pac. 50], and Schroeder v. United States, 7 Fed. (2d) 60.”

In examining the evidence to determine whether it supports the judgment, and in searching the record for error, it should be remembered that there is only a narrow period during which acts committed can now be deemed punishable. All charges of criminality arising out of the negotiations in the early part of May are barred by the statute of limitations. The convictions on the counts of offering and negotiating for sale are clearly improper, and the sole question is as to the propriety of the conviction on the count of actual sale

The letter of Hiss Kloster, sent on May 17, 1930, was an offer to purchase the stock on the condition that she might pay for it on May 20th. Defendant’s answer was an acceptance of the offer, and the contract of sale was complete upon posting of the letter of acceptance. Hence it is of great importance to fix definitely the time when the defendant’s letter was posted. The letter was dated May 18, 1930, and if deposited in the mail on this date, no conviction could be had, for the statute of limitations had run. It bore a postmarked date of May 19, 1930, and if deposited on that date, would have warranted a conviction. The rule seems generally recognized, though with some dissent, that in computing time, the day of commission of the offense is excluded. This is the rule in civil eases, and no compelling reason for a different rule in criminal cases has been advanced. (See Cal. Code Civ. Proc., sec. 12; 16 C. J. 230.) On this theory, the statute had not run if the letter was deposited in the mail on the date it was postmarked, and perhaps, from the evidence before it, the jury might have inferred that this was the case.

But the record shows that the case was tried on another theory, and this fact resulted in manifest injustice to defendant, preventing a fair trial, as will hereinafter appear. The prosecution in the court below proceeded upon the theory that the essential date, upon which the crime was committed, was May 20th. The statements of the prosecution clearly showed such a limitation. In consonance with this theory, the trial court instructed the jury that the 20th was the only date; and the 20th was within the period of the statute of limitations, as we have seen. But the evidence shows nothing more than the mailing of a letter by Miss Kloster with the money on that date. The actual contract was completed when defendant’s letter was posted —either on the 18th or the 19th. The sending of the money was not a necessary part of the making of the contract, any more than the delivery of the stock, which did not- take place until June. Hence the evidence lends no support to the conclusion that a crime was committed on the 20th. Yet because of the erroneous theory and instructions, defendant applied himself to the disproof of this theory alone, and made no effort to disprove a contract completed on the 19th.

It is entirely possible, and defendant so contends, that in the event the question of a possible conviction based upon a contract on the 19th were presented, he might produce evidence to show the actual time of posting of the letter, and might be able to establish its posting on the 18th, which would render a conviction impossible. It therefore appears that the erroneous theory of the prosecution and the trial court seriously prejudiced the defendant and prevented a fair trial.

The judgment and order denying a new trial are reversed.


text:
    [S. F. No. 15084.
    In Bank.
    July 31, 1934.]
    EDMOND MIRABITO, a Minor, etc., Respondent, v. SAN FRANCISCO DAIRY COMPANY (a Corporation) et al., Appellants.

      Pillsbury, Madison & Sutro, Eugene M. Prince and Norbert Korte for Appellants.
    Sol Silverman and George Olshausen for Respondent.
    Bronson, Bronson & Slaven, as Amici Curiae on behalf of Appellants.
   THE COURT.

A hearing was granted in this case after decision by the District Court of Appeal, First Appellate District, Division Two, for the purpose of giving further consideration to the contention of appellants that the verdict was arrived at by means of a resort to chance and hence might be impeached by affidavits of the jurors.

The facts are stated in the opinion of Mr. Justice Spence as follows:

“This action was brought to recover damages for personal injuries sustained by plaintiff, a boy seven years of age. ■ A jury trial was had and a judgment for $5,000 was entered in favor of plaintiff and against the defendants San Francisco Dairy Company and Ray Vogel. Said defendants appeal from said judgment.
“On this appeal it is urged: (1) That a new trial should have been granted because of misconduct on the part of the jury ‘in resorting to the determination of chance’; (2) that the evidence was insufficient to sustain a judgment .against the defendant San Francisco Dairy Company, and (3) that the damages awarded were excessive.
“Due to the nature of appellants’ contentions, a detailed statement of the facts surrounding the happening of the accident is not required. Suffice it to state that a milk truck driven by the defendant Vogel and bearing the name of the San Francisco Dairy Company struck the rear end of another automobile, which, in turn, struck a wooden barricade erected around an excavation. Some of the planks of the barricade were broken by the impact and one of said planks was thrown against respondent, thereby causing his injuries.
“During the trial one of the jurors was excused. The parties stipulated that the trial might proceed with eleven jurors and further stipulated that it should require nine of the eleven jurors to return a verdict. Upon the motion for a new trial appellants presented numerous affidavits for the purpose of showing misconduct. It appears therefrom that after nine of the jurors had agreed to return a verdict in favor of plaintiff, the question of the amount of the verdict was discussed at length. The amounts proposed ranged from $1,500 to $10,000, but the affidavits do not show what amounts were proposed between these two sums or how man)' jurors were agreed upon any particular sum. The affidavits of three of the jurors then continued as follows: ‘After considerable discussion the jurors could not agree upon a definite and certain sum as their verdict and it was apparent that it would be difficult to arrive at an amount upon which nine of the jurors would agree and that a deadlock might result; thereupon it was proposed and the jurors agreed that the jury would proceed and arrive at its verdict as follows: A single vote should be taken on two amounts, one for $5,000 and the other for $2,000, and the amount for which a majority of the jurors should vote would be considered and returned as the unanimous verdict of the jury. Thereafter, and pursuant to said agreement, a ballot on said two amounts was taken and the vote recorded thereon was eight jurors for $5,000 and three jurors for $2,000. Thereupon, pursuant to said previous agreement and not otherwise, and without further deliberation, discussion, balloting or assent on the part of or by any of the jurors, said sum of $5,000 was entered by the foreman in the form of verdict prepared by the court, and no further ballot was taken or assent given to said verdict other than as hereinabove set forth. Thereupon said verdict for $5,000, without further discussion, ballot or assent, was returned to the court pursuant to said agreement and not otherwise as the unanimous verdict of the jury. Affiant is one of the jurors who voted for the sum of $2,000 and affiant did not thereafter change his said vote while in the jury room, and upon the poll of the jury in court after said verdict had been so returned affiant stated that said verdict was his verdict solely because of said agreement to abide by the vote of the majority.’ ”

The respondent offered counter-affidavits made by some of the jurors, including some of the same jurors whose affidavits were offered by the defendants, which tended to show a discussion and acceptance of the $5,000 verdict before it was written and announced by the foreman.

It is conceded that under section 657, subdivision 2, of the Code of Civil Procedure, misconduct of the jury may be shown by affidavits of the jurors only when “any one or more of the jurors have been induced to assent to any general or special verdict, or to a finding on any question submitted to them by the court, by a resort to the determination of chance”. Unless an agreement to abide by the vote of a majority, which is less than the number of jurors required to reach a lawful verdict, constitutes a “resort to the determination of chance” the affidavits offered upon the motion for new trial were incompetent.

“Chance” is commonly understood to imply an absence of explainable or controllable causation and has, moreover, been defined by this court as “hazard, risk, or the result or issue of uncertain or unknown conditions or forces”. (Dixon v. Pluns, 98 Cal. 384, 387 [33 Pac. 268, 35 Am. St. Rep. 180, 20 L. R. A. 698].) That case held the so-called quotient verdict to be a resort to the determination of chance and is urged by appellants as determinative of the question here raised. We do not regard that case as controlling for the reason that there existed an additional unknown element not present in the case under consideration, the jury did not know the figures upon which it was voting. Here each juror accepted one of the two known figures as his first choice and, by way of compromise and for the sake of coming to an agreement, agreed to accept the other as his verdict if it should be the first choice of the majority. To our minds there was no operation of any unknown force or unexplainable cause but an exercise of the judgment of each juror. Each juror by .an act of conscious volition participated in the determination of the amount of the verdict even though he may have reached his decision by other methods than by weighing the evidence and may have based his judgment upon considerations other than his own opinion of the proper amount of damages to be awarded. The agreement which appellants attempted to show was not an agreement to resort to the determination of chance.

With regard to the second ground of appeal, we are satisfied that the disposition made by the District Court of Appeal is correct and we hereby adopt the following portion of its opinion as the opinion of this court.

“Appellant San Francisco Dairy Company makes the further contention that the evidence was insufficient to sustain the judgment against it. In our opinion this contention is without merit. It is based solely upon the dlal-m that there was no evidence to show that appellant Vogel was the agent or employee of appellant San Francisco Dairy Company or that he was acting within the scope of his employment at the time of the accident. It may he noted that the name of appellant San Francisco Dairy Company indicated that said company was engaged in the dairy business. The truck in question was a milk truck which had been regularly used by Vogel for some time for the purpose of delivering milk over his route. His testimony relating to the time of the accident was ‘I was driving on my route. ’ The truck bore signs on both sides thereof with the name ‘San Francisco Dairy Company’ thereon. It was kept with many other similar trucks bearing similar signs at the place where appellant San Francisco Dairy Company maintained its office. At this place the names ‘San Francisco Dairy Company’ and ‘Riverdale Dairy Company’ appeared at the entrance. Vogel reported there each morning, started from there on his route with said truck and returned there at the end of the day. There was other testimony in the nature of hearsay evidence relating to the ownership of the truck and the employment of Vogel, but the parties are not agreed upon whether this particular testimony is available to respondent on this issue. We need not discuss this question, for we believe that the testimony above mentioned amply supported the inference that Vogel was acting for appellant San Francisco Dairy Company at the time the accident occurred. (Hartig v. American Ice Co., 290 Pa. 21 [137 Atl. 867]; Holzheimer v. Lit Bros., 262 Pa. 150 [105 Atl. 73]; Williams v. Ludwig Floral Co., 252 Pa. 140 [97 Atl. 206]; Klusman v. Harper, (Mo. App.) [298 S. W. 121]; Mann v. Stetvart Sand Co., 211 Mo. App. 256 [243 S. W. 406]; Fleischman v. Polar Wave Ice & Fuel Co., 148 Mo. App. 117 [127 S. W. .660] ; Robeson v. Greyhound Lines, 257 Ill. App. 278; Breen v. Dedham Water Co., 241 Mass. 217 [135 N. E. 130]; Berry on Automobiles, 6th ed., sec. 1360.) The appellant corporation calls our attention to Vogel’s testimony to the effect that he was not working for appellant San Francisco Dairy Company, but for the Dairy Delivery Company. They also refer to the evidence to the effect that the truck was not owned by the appellant San Francisco Dairy Company, but by the Dairy Delivery Company and the further evidence that Vogel was paid by the last-named company. We believe, however; that such testimony merely created a conflict with other testimony to which reference has been made. Furthermore, the president of appellant San Francisco Dairy Company, who was also the president of the Dairy Delivery Company, made the following statement in explanation of his testimony: ‘The San Francisco Dairy Company is a non-operating corporation. In other words, it is a part and subsidiary of the Dairy Delivery Company. The name of the San Francisco Dairy Company is used as a business name, and the corporation kept as is for that purpose, recognition of the name of the San Francisco Dairy. ’ He did not deny having made the statement that ‘all these companies were one’. It further appeared that the vice-president of San Francisco Dairy Company was also the vice-president of the Dairy Delivery Company. The same situation existed with respect to the office of secretary. Upon all the testimony taken together, the only logical conclusion to be drawn was that appellant San Francisco Dairy Company was merely the alter ego of the Dairy Delivery Company. We are therefore of the opinion that the evidence was sufficient to sustain the verdict against appellant San Francisco Dairy Company.”

The third point raised by appellants is that the damages are excessive. The injuries for which they were awarded as compensation were a splintered fracture of the first metatarsal bone of the right foot, which is the bone extending from the base of the great toe up to the instep, deep abrasions and lacerations on the back of the right foot and nervous shock. The evidence as to the extent, seriousness and probable permanence of the injuries is sharply conflicting but, resolving every conflict in favor of the respondent and giving him the benefit of every inference that can reasonably be drawn in support of his claim, as we are bound to do in considering a question of this nature, we cannot say the damages are excessive. Plaintiff’s mother and grandmother testified that he suffered great pain and discomfort, largely contributed to by the reaction from the anti-tetanus serum which he was given, and experienced severe nervous shock, that he was forced to wear a cast for three months and used crutches for four months. It is not disputed that the great toe of the right foot is dorsiflexed or bent up due to injuries of the nerves in that region or irritation of the nerves crushed- in the scar on the back of the right foot' and that there is some limitation of movement of the toe. There is medical evidence in the record from which the jury might reasonably have concluded that the strength and usefulness of the foot are permanently impaired, that plaintiff is developing flat feet as a result of the injuiy to the right foot and the extra burden put on the left foot, or at least that an existing tendency to flat feet was aggravated by the injury, and that the flexion of the toe would probably be permanent and would interfere with any activity requiring the use of the feet, since it furnishes the main propulsive power of the foot. On this record it cannot be said that the award of $5,000 is so “grossly disproportionate to any reasonable limit of compensation warranted by the facts as to shock the sense of justice and raise at once a strong presumption that it is based on prejudice or passion rather than sober judgment”, which must be the case before a reviewing court may set aside a verdict as excessive. (Ware v. McPherson, 213 Cal. 120 [1 Pac. (2d) 433] ; Hart v. Farris, 218 Cal. 69, 77 [21 Pac. (2d) 432].) We are the less inclined to do so in a case such as the present where- the jury and the trial judge, who denied a motion for a new trial on this ground among others, had before them demonstrative evidence of the injury to plaintiff’s foot and the impairment of its function and were able to judge for themselves the extent to which it fell short of being a normal foot. Plaintiff was present in the court and was required to walk and run and jump. The medical witnesses used the foot itself to illustrate their testimony. These demonstrations were especially helpful in arriving at a conclusion on the facts.

The judgment is affirmed.

Rehearing denied.


author: SHENK, J.

text:
    [S. F. No. 15104.
    In Bank.
    July 31, 1934.]
    GEORGE L. SHEETS, Respondent, v. SOUTHERN PACIFIC COMPANY (a Corporation) et al., Appellants.

      Dunne & Dunne and Dunne, Dunne & Cook for Appellants.
    J. Horton Beeman, George C. Hadley and Norman S. Menifee for Respondent.
   SHENK, J.

This is the second appeal in this case. The action was brought to recover damages for personal injuries sustained by the plaintiff when a freight-car of the defendant railroad company collided with the gasoline truck which the plaintiff was driving while the train crew was making a “flying switch” at an intersection. On the first trial the jury brought in a verdict of $7,500 for the plaintiff. A motion for a new trial was granted. On appeal the order granting a new trial was affirmed. (Sheets v. Southern Pacific Co., 212 Cal. 509 [299 Pac. 71].) On the second trial the jury also returned a verdict for the plaintiff in the sum of $7,500. A motion for a new trial was denied. The defendants now appeal from the judgment entered on that verdict. The opinion on the former appeal is referred to for a more complete statement of the facts. It was contended on that appeal that on the record the plaintiff was guilty of contributory negligence as matter of law. It appeared that the plaintiff had stopped his truck at the appropriate distance from the railroad tracks; that the bralceman who had signaled the plaintiff to stop left the crossing and walked in the direction of the locomotive, and it was then that the plaintiff moved his truck forward; that the plaintiff depended to a certain extent on the action of the bralceman and would not have attempted to cross had the latter remained on the crossing. On those and other facts appearing in the. former record the rule was applied that a railroad company will not be permitted to encourage a relaxation of vigilance by assurances that the danger had been minimized and at the same time hold persons to the same quantum of care as if no safety measure (here the signal of the brakeman to the plaintiff to stop), had been adopted. Decisions were referred to “tending to indicate that when a plaintiff is thrown off his guard by the conduct of the defendant or is lulled thereby into a sense of security, so that he goes upon a crossing, as the plaintiff here did, he is not chargeable with contributory negligence as matter of law. . . . The fact that the brakeman left the crossing after the engine had passed and before the ‘shunted’ car had reached the crossing may well have led the plaintiff, acting as a reasonably prudent man, to assume that the danger had passed, thus causing him to relax his diligence. As stated in the last ease above cited [Brown v. New York Cent. Ry. Co., 32 N. Y. 597 (88 Am. Dec. 353)], ‘it is asking too much, to say that it was negligence, as matter of law, not to have anticipated that the detached cars were following in the rear of the train that had passed . . . ’ Therefore, following the ease of Gregg v. Western Pac. Ry. Co., supra [193 Cal. 212 (223 Pac. 553)], we are of the opinion that the question whether plaintiff, under all the circumstances, exercised ordinary care for his own safety was one for the jury.”

The decision of the court on the former appeal is the law of the case. It was unquestionably so recognized by the trial court and as such is binding on the parties and on this court on this appeal, provided the state of the facts now presented is substantially the same as shown on the former appeal. (Klauber v. San Diego Street Car Co., 98 Cal. 105 [32 Pac. 876]; Ellis v. Witmer, 148 Cal. 528 [83 Pac. 800]; 2 Cal. Jur., pp. 944, 1042.)

The first question to be determined is whether the evidence at the second trial is so substantially different as to justify a conclusion that the decision on the former appeal that the issue of the plaintiff’s alleged contributory negligence presented a question for the jury is not controlling. Two variations in the testimony of the plaintiff are relied upon to create such a substantial difference as to justify the court in declaring that the doctrine of the law of the case is inapplicable and that the conduct of the plaintiff constitutes contributory negligence as a matter of law. On the first trial the plaintiff testified that at the time he started to cross the track he did not notice whether the “wig-wag” was operating; on the second trial he stated that at that time he did not pay any attention to it. On the first trial he stated that he looked to his left and to his right before starting up; on the second trial on direct examination he gave the same testimony, but on cross-examination stated that he looked to his left, and “glanced” to his right, which was the direction from which the freight-car was moving. These are the differences which are claimed to be substantial. While there is some change in phraseology it cannot be said that there is a material change in meaning or substance. Whether the plaintiff took no notice of the “wig-wag” in the one instance or paid no attention to it in the other would seem to make no substantial difference for the reason that the jury was justified in concluding that the plaintiff’s action in starting across the track was influenced by the conduct of the company’s human signaling agency, the brakeman. The same reason would apply to the difference in wording in the recital of what the plaintiff did in making observations to the right and left before the conduct of the brakeman caused him to relax his vigilance. In this connection the defendants claim that the application of section 135 of the California Vehicle Act is a new question in the case as to which this court may determine that as a matter of law the plaintiff was guilty of negligence contributing to his injuries by conduct which may be construed as a violation of the provisions of that section. That section provides that an operator of a motor-truck carrying explosive or inflammable substances shall bring his vehicle to a full and complete stop at a specified distance from any railroad crossing and while stopped shall look and listen in both directions along the tracks for approaching trains or cars. It is admitted that the plaintiff brought his motor-truck to a full stop at the required distance and there is testimony that he looked and listened, in both directions; but it is contended that there is no evidence that he looked in both directions along the tracks, and therefore was guilty of a violation of the statute resulting in his contributory negligence as matter of law. The point is now made for the first time. The right generally to raise new points of law for the first time on appeal is not questioned. (See Trower v. City and County of San Francisco, 157 Cal. 762 [109 Pac. 617]; 2 Cal. Jur., p. 964.) But here the case appears to have been tried on the theory that section 135 was not a factor in the case. If the effect of that section had been relied upon as a defense it may be that the plaintiff could have met the issue by proper proof. Also, if the claimed lack of evidence had been called to the attention of the trial court an appropriate instruction could have been given advising the jury of the requirements of section 135. Whether the defendants on this record are now foreclosed from raising the point need not be decided for the reason that it does not necessarily follow that the asserted failure of proof is fatal. The purpose of section 135 is to require extraordinary safety precautions to be taken by the truck driver. But compliance in the respects enumerated in the statute must as to the facts here presented be appraised as of the time of or immediately before the accident. It may be assumed that if the plaintiff had violated the statute without the intervening action of the employee of the company to influence the plaintiff’s • conduct, the latter would have been guilty of contributory negligence as matter of law. However, since the employee’s conduct and reliance thereon by the plaintiff intervened, it was a question for the jury to determine under all the circumstances the proximate cause and contributing causes of the accident.

The defendants contend that the plaintiff was not entitled to rely on any action of the brakeman in leaving the crossing after the engine had passed and before the “shunted” ear had reached the crossing, as constituting evidence of negligence on the part of the defendants, but that the plaintiff was restricted to the issues framed by the complaint and answer. The complaint alleged that the defendants “so negligently and carelessly operated said freight car” as to cause the accident and injuries complained of. The defendants urge that the plaintiff is restricted to proof of the operation of the freight-car to sustain his claim of negligence on the part of the defendants, that being the only charge of negligence in the complaint, and that the action of the brakeman in guarding the crossing and stopping traffic while the “flying switch” was being made was no part of the operation of the train or car. This matter was presented to the trial court which refused the defendant’s offered instruction on the subject, but ruled and instructed that the plaintiff “had a right to rely on any conduct of either of the personal defendants.” We perceive no error in the ruling and instruction. Under the facts of this case the brakeman was acting as a member of the train crew and any act of his in directing the completion of the “flying switch” was a participation in that operation and within the issues.

The defendants offered instructions on the issue of the plaintiff’s contributory negligence. The instructions offered were given with the addition of a qualification which charged in effect that in determining whether the plaintiff acted with ordinary care the jury was entitled' to consider whether or not the brakeman left the road after the locomotive passed in such manner as to lead an ordinarily prudent person to believe that the danger had passed. No error can be based upon the inclusion in the instructions offered and given of the substance of the modification. The plaintiff was entitled to have the jury charged in accord therewith. (Sheets v. Southern Pacific Co., supra.)

We have examined in detail the other assignments of error in the giving of instructions. We find on a review of the entire record that no prejudicial error was committed.

The judgment is affirmed.

Preston, J., Waste, C. J., Curtis, J., and Langdon, J., concurred.

Rehearing denied.


author: SEAWELL, J.

text:
    [S. F. No. 14970.
    In Bank.
    August 6, 1934.]
    CONSOLIDATED TITLE SECURITIES COMPANY (a Corporation), Petitioner, v. ED W. HOPKINS, County Assessor, etc., Respondent.

      Walter B. Kibbey and William H. B. Haymond for Petitioner.
    Everett W. Mattoon, County Counsel, and Gordon Boiler, Deputy County Counsel, for Respondent.
   SEAWELL, J.

Petition for writ of mandate. Petitioner, Consolidated Title Securities Compaq, leased a title searching plant owned by it to Security Title Insurance and Guarantee Company, a title insurance company with offices in the city of Los Angeles. The notice of personal property taxes served on petitioner on July 11, 1933, by respondent County Assessor of Los Angeles County charged petitioner with taxes in'the sum of $12,029.62, levied on office equipment, a law library and title searching plant, assessed respectively at $12,070, $750 and $270,230. Petitioner contends that said property is not subject to local taxation by virtue of the fact that it is in the sole possession and use of petitioner’s lessee, a title insurance company which annually pays a tax to the state based on gross premiums under the nrovisions of article XIII, section 14, subdivision b, state Constitution. Petitioner is not itself a title insurance company. It tendered to respondent assessor the sum of $74.99, which is the amount charged to it in said tax notice for taxes on notes and solvent credits. Upon the refusal of the assessor to issue a receipt showing payment of the tax bill in full, petitioner deposited the sum tendered in a bank in the name of the assessor, and thereafter brought this proceeding in mandamus to compel the assessor to issue to it a receipt in full. Petitioner alleges that the tax officials of other counties are also seeking to subject similar property in their respective counties owned by petitioner and in the possession of its lessee to local taxation.

Under the decisions of this court in Whitmore v. Brown, 207 Cal. 473 [279 Pac. 447], and Central Mfg. Dist. v. State Board of Equalization, 214 Cal. 288 [5 Pac. (2d) 424], and the decision of the Appellate Court in Spring Valley Water Co. v. Planer, 88 Cal. App. 170, [263 Pac. 323], in which a petition for hearing in this court was denied, an original proceeding in mandamus is a proper remedy to compel the issuance of an official receipt in full.

The provision of section 14, subdivision b, article XIII, which petitioner contends frees the personal property owned by it and in the possession of its lessee, a title insurance company, from local taxation is as follows:

“Every insurance company or association doing business in this state shall annually pay to the state a tax of one and one-half per cent upon the amount of the gross premiums received upon its business done in this state, less return premiums and reinsurance in companies or associations authorized to do business in this state; provided, that there shall be deducted from said one and one-half per cent upon the gross premiums the amount of any county and municipal taxes paid by such companies on real estate owned by them in this state. This tax shall be in lieu of all other taxes and licenses, state, county and municipal, upon the property of such companies, except county and municipal taxes on real estate. ...” (The balance of the paragraph is not pertinent to the inquiry before us. Italics supplied.)

Section 14 was amended in "June, 1933, when our tax system was changed in important particulars by initiative vote of the people. The initiative measure provided, however, that the provisions amendatory of section 14 should not go into effect until .January 1, 1935. As will appear from our discussion hereinafter, the amendments made in the paragraph of said section which affects insurance companies (section 14, subdivision b), do not change the law with regard to the question now before us—whether personal property not owned by an insurance company, but in its exclusive possession under lease and used by it in the conduct of its business, is free from local taxation under the “in lieu” provision of section 14, subdivision b, quoted above.

In contending that such leased property cannot be taxed locally to the owner-lessor petitioner relies strongly on the decisions of this court in Morgan Adams, Inc., v. County of Los Angeles, 209 Cal. 696 [289 Pac. 811], and Central Mfg. District, Inc., v. State Board of Equalization, supra, and the decision of the Supreme Court of the United States in Hopkins v. Southern California Tel. Co., 275 U. S. 393 [48 Sup. Ct. 180, 72 L. Ed. 329], These cases involved the interpretation of the provisions of section 14, subdivision a, article XIII, Constitution, which provide for the payment. of a gross receipts tax to the state by certain designated public utility corporations.. In the cited cases the leased property upon which the local authorities sought to charge the owner with local ad valorem property taxes consisted respectively of a concrete building occupied by the lessee telephone company exclusively for its office quarters; real property and improvements consisting of railroad tracks, rights of way, buildings, structures and appliances suitable to the operation of a railroad, which property was owned by a private nonpublic utility corporation and leased to a public utility railroad corporation; and, in the federal case, 300,000 telephone instruments, or “talking sets”, used by the lessee company in the operation of its telephone system. In each case it was held that the property was not subject to local taxation.

There are important distinctions between those provisions of section 14, subdivision a, article XIII, establishing the public utilities gross receipts tax and the provisions of section 14, subdivision b, under which insurance companies are required to pay a gross premiums tax, by reason of which the decisions under the public utilities tax provision are not necessarily controlling as to insurance companies. Under the constitutional provision as it continues in effect until January 1, 1935, the enumerated public utilities are required to pay to the state a tax equal to fixed percentages of their gross receipts from operation within this state “tipon their franchises, roadways, roadbeds, rails, rolling stock, poles, wires, pipes, canals, conduits, rights of way and other property, or any part thereof, used exclusively in the operation of their business in this state”. The section makes provision for determining “gross receipts within this state”, when such companies are operating partly within and partly without the state. The tax based on gross receipts “is in lieu of all other taxes and licenses, state, county and municipal upon the property enumerated of such companies, except as otherwise in this section provided”. (Italics supplied.) Sections 3664^-3671, Political Code, restate the constitutional provision, define the term “operative property”, and otherwise elaborate the scheme of taxation provided for by the Constitution.

It is held that payment of the gross receipts tax by the lessee public utility company frees leased property used by the utility in the operation of its business from local taxation for the reason that the gross receipts tax is a tax upon all property used in the operation of the utilities business in this state, whether such property is leased or owned by the utility. (Morgan Adams, Inc., v. County of Los Angeles, supra; Central Mfg. District, Inc., v. State Board of Equalization, supra; Hopkins v. Southern California Tel. Co., supra.) By the terms of the constitutional provision the tax is upon all property used in the operation of the business in this state. In our decision in Southern California Tel. Co. v. Los Angeles County, 212 Cal. 121 [298 Pac. 9, 11], we said concerning it: “ . . . the tax levied upon gross receipts is a substituted tax, intended to be the equivalent of a tax on the property, and only differing from a tax directly on the property by reason of the fact that a different method of computation is employed. (See San Francisco v. Pacific Tel. & Tel. Co., 166 Cal. 244 [135 Pac. 971]; Pullman Co. v. Richardson, 185 Cal. 484 [197 Pac. 346].)” The theory of the tax, as explained in the decisions, is that gross receipts from operation furnish a fair measure for estimating the value of operative property and computing the tax upon it. Inasmuch as the gross revenues from operation do not depend upon whether the operative property is leased or

owned, and the amount of the tax is the same whether such property is leased or owned, the tax rests upon operative property without regard to its ownership, and to assess a local ad valorem tax against the owner on leased operative property is unauthorized double taxation. (Morgan Adams, Inc., v. Los Angeles County, supra, at p. 702; Central Mfg. District, Inc., v. State Board of Equalization, supra.) That is, the criterion adopted by the constitutional provision to determine freedom from local taxation is use in the public utility’s business, rather than ownership by the utility. Property which is not in use in the operation of the business of the utility, such as a building in course of construction and the land upon which it is situate, although owned by the utility, is neverthelsss subject to local taxation. (Southern California Tel. Co. v. County of Los Angeles, supra.)

But the provisions of section 14, subdivision b, article XIII, which provide for the gross premiums tax to be paid by insurance companies make no such classification between operative property without regard to ownership, on the one hand, and non-operative property on the other. Intangibles, such as stocks, bonds, mortgages and other se•curities in which the average insurance company invests a large portion of its receipts in order to provide a fund to meet losses, are free from local taxation under the “in lieu” provision of section 14, subdivision b, but are not “used” in the conduct of the insurance company’s business in the sense that operative property of a public utility corporation is used in the operation of its business. The gross premiums tax required to be paid by insurance companies, although in lieu of certain taxes upon property, is not, like the public utilities gross receipts tax, by the terms of the constitutional provision itself a tax upon property. Rather, it is a franchise tax exacted for the privilege of doing business in this state, and is recognized as such in the amendment to section 14 which goes into effect on January 1, 1935. Said amendment abolishes the public utilities gross receipts tax, and provides that all property owned or used by the specified utilities, other than their franchises, shall be subject to taxation to the same extent and in the same manner as other property at a value fixed by the state board of equalization annually. Said amendment further provides that the specified utilities shall pay a franchise tax to the state measured by net income under section 16 of article XIII, but this provision is especially made inapplicable to insurance companies, as to which the gross premiums tax is continued in force. Federal securities exempt from a property tax are generally included in an insurance company’s holdings.

The insurance company gross premiums tax frees from local taxation, except taxes on real estate, all “property of such companies”. Use of personal property in the conduct of the insurance company’s business is not the factor which determines freedom from local taxation. From a consideration of the constitutional provision relating to the gross premiums tax as a whole, and particularly the provision permitting the deduction from the amount of the gross premiums tax of all taxes paid by an insurance company on real estate “owned” by it, we are convinced that ownership by the insurance company is the factor which determines freedom of personal property from local ad valorem taxation. The gross premiums tax is not in lieu of taxes on real estate, but real property owned by an insurance company, or in its possession under lease from the owner, is subject to local ad valorem property taxes. The constitutional section provides, however, that insurance companies may deduct from the fixed percentage of gross premiums payable as a tax the amount of any taxes paid “on real estate owned by them in this state”. Thus, although as regards the tax collecting authorities the real property owned by an insurance company remains subject to a local ad valorem tax, in so far as the tax-paying company is concerned it is made clear that it shall not be required to pay an ad valorem tax on real property owned by it in addition to the full amount of the gross premiums tax, but the fixed percentage of gross premiums is the full measure of the tax burden upon it. By the terms of the constitutional provision the offset or deduction is allowed only for taxes paid on real estate owned by insurance companies. Ad valorem taxes assessed against real property in their possession under lease from the owner are not permitted to be deducted. Any other construction would do violence to the meaning of the word “owned”. Personal property owned by an insurance company is relieved of the burden of local ad valorem taxes directly under the “in lieu” provision, rather than indirectly by deduction of the tax paid locally from the sum payable as a gross premiums tax, as in the case of real property. But we are unable to find that by virtue of this difference personal property leased to an insurance company is free from local taxes, while real property leased to such a company remains subject thereto. The constitutional provision does not authorize a different rule to be applied to personal property leased to an insurance company than is applied to real property leased to such a company.

We are mindful that under section 14, subdivision a, article XIII, property used in the operation of the business of public utilities is “their property” and the “property of such companies”, but this is because use in the operation of the utilities business is the test therein adopted.

The alternative writ of mandate is discharged and the peremptory writ is denied.

Curtis, J., Preston, J., Shenk, J., and Waste, C. J., concurred.

Rehearing denied.

Curtis, J., and Preston, J., voted for a rehearing.