text:
    [S. F. No. 16062.
    In Bank.
    June 27, 1938.]
    PACIFIC GREYHOUND LINES (a Corporation), Petitioner, v. RAILROAD COMMISSION OF THE STATE OF CALIFORNIA, Respondent. SOUTHERN PACIFIC COMPANY (a Corporation), Petitioner, v. RAILROAD COMMISSION OF THE STATE OF CALIFORNIA, Respondent.
    [S. F. No. 16063.
    In Bank.
    June 27, 1938.]

      Brobeck, Phleger & Harrison, H. C. Lucas and Earl A. Bagby for Petitioner in S. F. No. 16062.
    Guy V. Shoup, Burton Mason and E. J. Foulds for Petitioner in S. F. No. 16063.
    Ira H. Rowell, Roderick B. Cassidy and George E. Howard for Respondent.
    Charles H. Woods, Robert Brennan, Gerald E. Duffy, William F. Brooks, George W. Lupton, Jr., Jonathan C. Gibson, Allan P. Matthew and McCutchen, Olney, Mannon & Greene, as Amici Curiae, on Behalf of Respondent.
   THE COURT.

On October 3, 1935, the Santa Fe Transportation Company, which is wholly owned and controlled by the Atchison, Topeka and Santa Fe Railway Company, filed certain applications with the respondent Railroad Commission wherein it sought, among other things, the issuance of certificates of public convenience and necessity authorizing the establishment of a coordinated and integrated rail and stage service for the transportation of passengers and their baggage, over four definitely described routes, in intrastate commerce. Among other things, the proposed service contemplated a rate structure of one and one-half cents a mile, the fares to be computed on the short-line mileage, rail or stage, with unlimited stop-over privileges and interchangeability of tickets on rail or stage. Following 146 days of hearing, during which 584 witnesses were examined, 855 exhibits were received and 17,205 pages of testimony were adduced, the respondent commission, all of the members concurring, made its order on April 18, 1938, finding and declaring that public convenience and necessity require the establishment of the proposed passenger service over said four routes and ordering the granting to the Santa Fe Transportation Company the necessary certificates of public convenience and necessity essential to the commencement and establishment of such service.

The petitioners, Pacific Greyhound Lines and Southern Pacific Company, acting separately, instituted the above-entitled proceedings to review and annul the order of the respondent commission. Attached to each petition is a copy of the seventy-four page opinion of the respondent commission jvherein the great volume of evidence adduced before it is exhaustively and minutely detailed. Many briefs have been filed herein by those interested wherein the asserted merits and demerits of such opinion and the findings therein contained are respectively extolled and condemned.

Our examination of these several documents has satisfied us that the findings of the respondent commission are based upon and supported by substantial evidence, particularly the findings to the effect that “public convenience and necessity require the operation by Santa Pe Transportation Company, in conjunction with The Atchison, Topeka and Santa Pe Railway, of a coordinated and integrated rail and stage service for the transportation of passengers and their baggage in intrastate commerce in California” over designated routes and that “Greyhound cannot render, and Greyhound will not render, all or any part of the service proposed by Santa Pe Transportation Company, in its four applications, to the satisfaction of this Commission”. This latter finding makes it unnecessary for us to here concern ourselves with the interpretation of section 50]4 of the Public Utilities Act. The findings of the respondent commission made in the exercise of its constitutional and statutory authority in determining whether public convenience and necessity require the establishment of the proposed service are not subject to judicial review. (Oro Elec. Corp. v. Railroad Com., 169 Cal. 466, 471 [147 Pac. 118]; San Diego & Coronado Ferry Co. v. Railroad Com., 210 Cal. 504, 510-513 [292 Pac. 640]; Southern California Edison Co. v. Railroad Com., 6 Cal. (2d) 737, 748 [59 Pac. (2d) 808].) The commission has made no order directly against the petitioners. However, they claim that they are entitled to protection against competition from another, and that the order of the commission will deprive them of their property without due process of law in violation of their rights guaranteed by the Constitution of the United States. The record presented on these applications is sufficient upon which to conclude that the commission has acted within its power and regularly pursued its authority in making the order complained of.

It follows that the applications filed herein for writs to review and annul the above-mentioned order of the respondent commission, should be, and each is, denied.


source: Caselaw Access Project

author:
SHENK, J.
      EDMONDS, J., Dissenting.

license: Public Domain

text:
    [S. F. No. 16002.
    In Bank.
    June 28, 1938.]
    ALBERT WALLIS et al., Petitioners, v. BOARD OF CIVIL SERVICE COMMISSIONERS OF THE CITY OF LOS ANGELES et al., Respondents.

      Haas & Home for Petitioners.
    Ray L. Chesebro, City Attorney, Leon T. David, Assistant City Attorney and John Beardsley, Deputy City Attorney, for Respondents.
   SHENK, J.

This is an original proceeding in mandamus to compel the respondent officers of the city of Los Angeles to approve and audit the payroll of the department of water and power of the city of Los Angeles in so far as it affects the petitioners, and cause to be paid to them the sum of $72 each on account of compensation for services rendered as carpenters in said department for the first half of February, 1938. As the return to the alternative writ is a general demurrer to the petition, the facts are undisputed.

For many years the Los Angeles Gas and Electric Company, a public utility corporation, owned and operated an extensive distributing system for furnishing electricity to the residents of the city of Los Angeles for domestic and commercial purposes. This distributing system was maintained and operated by the company for many years before the establishment by the city of Los Angeles of its municipally owned electrical system under the charge, supervision and control of the board of public service commissioners of said city. After the establishment of the city’s system the businesses of the two systems were in competition in the city and the question of the acquisition by the city of the electrical distributing system of the public utility corporation was a matter of frequent if not constant discussion and agitation. Numerous controversies of considerable moment had developed and were pending at the time of the submission by the city council to the voters of the city of a series of elaborate amendments to the freeholders’ charter of the city-designed to accomplish the settlement of all the controversies between the corporation and the city and the purchase by the city of the corporation’s electrical distribution system and plants for a base price of $46,340,000. The proposed charter amendments were ratified by the voters of the city at an election held for that purpose on December 8, 1936, and were approved by the legislature on January 8, 1937. (Stats, 1937, pp. 2572-2631.) Theretofore, in 1935, and in anticipation of the acquisition of the utility property by the city, the city charter had been amended by adding section 431, reading as follows: “See. 431. All persons employed in the operating service of any public utility hereafter acquired by the city, or any department thereof, at, and for at least one year immediately prior to, the date of such acquisition may be retained and employed by the City, or such department, in their respective positions, as nearly as may be, and so long as continuously so retained and employed in such positions, shall be exempt from the civil service provisions of this charter ,- provided, however, that no person not a citizen of the United States shall be so retained and employed and that persons so retained and employed shall, within three months after such acquisition, conform to any residence requirements applicable to employees of said city, or department, in like positions. ’ ’ (Stats. 1935, p. 2356.)

It is apparent from the allegations of the petition that during the campaign for and against the charter amendments to be voted on at the election of December 8, 1936, the ques-. tion became acute as to what would be the fate of the employees of the public utility corporation with reference to their employment in the event the charter amendments be adopted and the employment of the corporation’s employees be terminated upon the acquisition by the city of the electrical distributing system. To meet this situation, and prior to the election of December 8th, the board of water and power commissioners adopted and made public the following resolution:

“WHEREAS, it is contemplated that a charter amendment will be submitted to the voters of the City on December 8, 1936, which provides, among other things for the purchase of the electric system of the Los Angeles Gas and Electric Corporation by the City of Los Angeles through the Department of Water and Power; and
“WHEREAS, it is provided by section 431 of the Charter of the City of Los Angeles that all persons employed in the operating service of any public utility hereafter acquired by the city, or any department thereof, at, and for at least one year immediately prior to, the date of such acquisition, may be retained and employed by the city, or such department, in their respective positions, as nearly as may be, and, so long as continuously so retained and employed in such positions, shall be exempt from the civil service provisions of the charter, subject to the provision that no person not a citizen of the United States shall be so retained and employed, and that all persons so retained and employed shall, within three months after such acquisition, conform to any residence requirements applicable to employees of said city, or department, in like positions; and
“WHEREAS, it appears desirable that this Board should define its policy with reference to the employment of persons who at the time of the acquisition of said electric system, if consummated, may be employed by said Corporation, and whose employment by said corporation may be terminated by such acquisition; - and
“WHEREAS, the Chief Electrical Engineer and General Manager has reported to this Board that after a careful survey of the work of the Department and of the system and organization of the Corporation it appears that substantially all of the employees regularly employed in the operating service of said Corporation, and devoting their time to the work of the electrical division of said Corporation, will be required in addition to the regular employees of the Department in the operatng service of the consolidated system;
“NOW, THEREFORE, BE IT RESOLVED that it is the sense and intention of this Board that upon such acquisition this Board should and will exercise the poAver granted to it by said section, in accordance Avith said report.”

FolloAving the favorable vote on the charter amendments and the acquisition of the electrical distributing system of the Los Angeles Gas and Electric Company, and in order to carry out in good faith the purpose and intent of section 431 of the charter and the foregoing resolution, the board of water and poAver commissioners employed certain persons who had formerly been employed in the operating service of the utility for at least one year immediately prior to the acquisition of the utility’s property by the city and Avere otherwise qualified to continue in service, and elected to retain them in their respective positions. They were continuously so retained and wére, by appropriate order of the commission, ordered paid for their services. It is clear that they should be so paid unless the record discloses a compelling reason why they should not.

Section 120 of the charter provides that the controller shall not approve any salary or compensation for services to any person holding or performing the duties of a position in the classified civil service, unless the payroll for such compensation bear the certificate of the board that the person named has been employed in accordance with the civil service provisions of the charter and the rules established thereunder and the payroll be approved by the civil service commissioners.

The payroll, including the petitioners’ compensation, was certified by the board of water and power commissioners in all respects as required by the rules governing that board, but the civil service commissioners refused to approve the same, basing their refusal on the requirements of rule XVIII, section 15, adopted by the civil service commissioners prior to the enactment of section 431 of the charter in 1935. The rule reads as follows: “Where exempt or non-Civil Service employees and classified employees are performing work of the same grade and class within a department and a suspension for lack of work, lack of funds or abolishment of position is to be made, no Civil Service employee may be suspended until all such exempt persons are laid off. ’ ’

It is alleged in the petition and is therefore admitted that the petitioners were employed by the public utility corporation in carpentry and similar work for one year prior to the acquisition of the distributing system by the city and that they were continuously employed by the- city in that work, after such acquisition. It is also alleged and admitted that during the period in which the petitioners performed the work for which they are demanding payment there were persons on the civil service list of the city as carpenters, certified to the department of water and power, and in the same classification'as the petitioners, who had been laid off by the department for lack of work while the petitioners were retained as carpenters.

The question presented is the scope to be accorded the exemption from civil service provisions of the charter as provided by section 431 of the city charter. The question does not involve the right of the petitioners as former employees of the utility to permanency in tenure of their employment, for clearly they have no such right except to the extent that the employer, the board of water and power commissioners, elects to continue them in employment under the prerequisite conditions provided by section 431, which conditions are here present. The provisions of that section merely confer the power on that board, in its discretion to employ former employees of the utility under those conditions. When the conditions are present, as here, and the employing board has elected to exercise that power, the persons employed are exempt from all the civil service provisions of the charter, which would necessarily include any rule adopted by the civil service commissioners pursuant to the civil service provisions of the charter. To hold otherwise would be to accord greater force to the rule than to the charter itself and to nullify the latter.

The clear purpose and intent of the exemption contained in section 431 of the charter and the action of the board thereunder was to render the employees of the department, situated as we find the petitioners, exempt from civil service only in the event that they are ‘ ‘ continuously so retained and employed”. The board may discharge or suspend such employees at its pleasure. The civil service rule would force a suspension contrary to the charter power to continue them in service. Such suspension under the preference rule of the civil service commission is entirely inconsistent with the continuity of service required by the charter in order that the petitioners have any standing at all as employees of the department. Such a limited and restricted exemption probably does not obtain with reference to any other employees of the city exempt from civil service. It is a special provision applicable to the class to which the petitioners belong. The people of the city have so provided in their charter and there can be no question of their power so to do.

The duty of the respondents to certify, audit and pay the warrants drawn by the board of water and power commissioners for the payment of the compensation of the petitioners has been sufficiently shown.

Let the peremptory writ issue as prayed.

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

EDMONDS, J., Dissenting.

I cannot agree with a decision which takes away the rights of civil service employees in the Department of Water and Power and allows them to be replaced by persons who worked for the Los Angeles Gas and Electric Corporation before its electrical distributing sj^stem was taken over by the city of Los Angeles. The result is that persons who have spent years in the city’s service and have acquired civil service rights, with seniority and other privileges, may be ousted in favor of the private corporation’s former employees. In my judgment, the provisions of the city charter expressly forbid such a conclusion, which is also contrary to all principles of civil service.

For many years the city has had exempt or noncivil service employees who constitute a special group of workers. The rule of the Board of Civil Service Commissioners, adopted pursuant to the provisions of the charter (sec. 125; Stats. 1933, p. 3146) gives civil service employees preference over the others. Under it “no Civil Service employee may be suspended until all such exempt persons are laid off”. When the city was about to take over the distributing lines of the private corporation the question as to how it could man the property to be acquired was an important one. The persons who had been operating the private system were just as necessary, for the time being at least, as the physical property. Obviously for some time after the competing system was purchased the city would require the services of hundreds of persons not only skilled in various trades and occupations but also familiar with the electrical distributing system of the company by which they had been employed. The then existing charter provisions and regulations of the Board of Civil Service Commissioners did not give the necessary authority for bringing such a large group of new employees into the city’s service as exempt employees, and presumably it would have been impractical to require civil service examinations.

The charter amendment approved by the voters of the city in 1935 provided the solution for this difficulty. Under its terms persons employed in the operating service of the public utility which the city acquired “may be retained and employed ... in their respective positions, as nearly as may be, and so long as continuously so retained and employed in such positions, shall he exempt from the civil service provisions of this charter ...” The purpose of this amendment is clear. Under its provisions the city was authorized to employ as persons “exempt from the civil service provisions of this charter” those who had formerly worked for the private corporation. But the Board of Water and Power Commissioners by taking over employees of the private corporation could not give them a civil service status. The new employees were not given any permanency of tenure, nor were they given the right to oust civil service workers. They came into the service of the city at a time when the charter specified that when a suspension for lack of work is to be made, and this is the situation which occasioned the present controversy, civil service employees are to be retained in preference to exempt persons. This policy is consistent with the purpose of civil service and protects seniority rights. (Ford v. Department of Water and Power, 4 Cal. App. (2d) 526 [41 Pac. (2d) 188]; Lotts v. Board of Park Commrs., 13 Cal. App. (2d) 625, 626 [57 Pac. (2d) 215].)

The resolution of the board of water and power commissioners adopted prior to the election at which the question of the acquisition of the private utility system was to be voted upon could not modify or supplant the provisions of the city charter even though it was passed in aid of the campaign to purchase the private system. Moreover, nothing in this resolution assumes to do so. It merely recites that the board will carry out the provisions of the proposed charter amendment, allowing it to employ those in the service of the private corporation,, at the date of the acquisition of its property, as exempt workers. Indeed, the resolution quotes the proposed charter amendment in full.

The petition should be denied.


author: SHENK, J.

text:
    [L. A. No. 16604.
    In Bank.
    June 28, 1938.]
    MINNIE GRANT, Respondent, v. SUN INDEMNITY COMPANY OF NEW YORK (a Corporation), Appellant.

      Elbert E. Hensley and W. H. Abrams for Appellant.
    Paul Taylor and Noel B. Martin for Respondent.
   SHENK, J.

Appeal by the defendant from a judgment for the plaintiff in an action on a policy of indemnity insurance issued to Thomas T. Harbeson and Mariam Harbeson.

The policy was issued in 1931 to the Harbesons, husband and wife, when they were the owners of a Studebaker automobile. The policy by its terms bound the defendant to indemnify the named assureds and any person who might drive the automobile with their consent, against liability up to $25,000 on account of injuries sustained by other persons through their operation of the car. In July, 1932, the Harbesons sold the Studebaker and bought a Chrysler automobile. Herndon Ryon was the minor brother of Mariam Harbeson and lived with the Harbesons. He frequently drove their car for them and at times operated it himself for his own purposes when it was not otherwise in use. On October 7, 1932, while Herndon Ryon was driving the Chrysler and was its sole occupant, he collided with Minnie Grant, the plaintiff herein, and caused injuries to her person. Minnie Grant brought an action against Thomas T. Harbeson, Herndon Ryon, and the latter’s father, for damages. In July, 1934, she recovered a judgment for approximately $6,775 and costs. Before the trial Thomas T. Harbeson died, and judgment was entered against Herndon Ryon and his father for the amount recovered. The defendants in that action prosecuted an appeal which terminated in an affirmance of the judgment in January, 1936. (Grant v. Ryon, 11 Cal. App. (2d) 101 [53 Pac. (2d) 170].) Prior to the time the judgment in that action became final and in November, 1934, Minnie Grant commenced the present action. During the trial and by leave of court the plaintiff filed an amendment to her complaint alleging the affirmance of the judgment in the case of Grant v. Ryon, supra. Judgment in the present action was rendered for the plaintiff.

On this appeal it is contended by the defendant that the court erred in permitting the amendment to the complaint. The defendant relies on numerous authorities, such as Wittenbrock v. Bellmer, 57 Cal. 12, McCormick v. North British Ins. Co., 78 Cal. 468 [21 Pac. 14], Lewis v. Fox, 122 Cal. 244 [54 Pac. 823], Jennings v. Ward, 114 Cal. App. 536 [300 Pac. 129], and Sutherland v. California Highway Ind. Exch., 88 Cal. App. 724 [264 Pac. 278], in support of its contention that a supplemental complaint may not be filed where the cause of action is not complete when the suit is commenced. The copy of the policy introduced in evidence by the defendant provided that the “company shall not be liable to pay any loss, nor shall any action be brought against the company to recover under this policy until a final judgment shall have been recovered against the assured in a suit covered thereby”. The defendant urges that the action when filed was premature and that an amendment would be ineffectual for any purpose under the rulings of the cited cases.

The law as stated in the cases relied on is not questioned. However, because of the facts found by the trial court with sufficient evidence to support them, we conclude that those authorities are inapplicable and do not require a reversal of the judgment. It appears that Thomas T. Harbeson lost his life in a fire which consumed his home, and that the fire also destroyed the policy here involved. Upon the entry of judgment against the Ryons in the personal injury action, the insurance company repudiated any liability on account of the judgment and refused to furnish the plaintiff with a copy of the policy or a statement of its terms. The plaintiff, without knowledge of the provisions of the policy, thereupon commenced the present action. It was not until the copy of the policy was introduced in evidence on the trial of the present, action that the plaintiff had notice of the special provision hereinabove quoted. It is a well-recognized rule, which we conclude is applicable to the special circumstances here, that the insurer may not repudiate the policy, deny all liability, and at the same time be permitted to stand on a provision inserted in the policy for its benefit. (Farnum v. Phoenix Ins. Co., 83 Cal. 246, 262, 263 [23 Pac. 869, 17 Am. St. Rep. 233]; Hill v. Mutual Benefit Health etc. Assn., 136 Cal. App. 508 [29 Pac. (2d) 285]; Continental Ins. Co. v. Wickham, 110 Ga. 129 [35 S. E. 287]; Royal Ins. Co. v. Martin, 192 U. S. 149 [24 Sup. Ct. 247, 48 L. Ed. 385]; Joyce, the Law of Insurance, 2d ed., vol. 5, sec. 3211.) Furthermore, under the facts shown, it may not be said that the trial court abused its discretion in permitting the amendment to the complaint.

The defendant also contends that two findings of the court are not supported by the evidence, namely, the finding that the coverage under the policy introduced in evidence, which designated only the Studebaker car, had been transferred to the Chrysler automobile; and the finding that Herndon Ryon had the implied consent of the Harbesons to drive the Chrysler car at the time of the accident. There is ample evidence in support of these findings. Both the oral and the documentary evidence disclosed the fact of the transfer by the defendant’s agent of the policy from the Studebaker to the Chrysler at the time of the purchase of the latter car. The history of the use of the car by Herndon Ryon during his residence with his sister, even though on the particular occasion express consent was not given, is sufficient evidence of their consent to its use by him at that time. (Phillips v. Cuccio, 5 Cal. App. (2d) 520 [42 Pac. (2d) 1050].)

The judgment is affirmed.

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

Rehearing denied.


text:
    [L. A. No. 16780.
    In Bank.
    June 28, 1938.]
    CITY OF CULVER CITY (a Municipal Corporation), Petitioner, v. VINCENT M. REESE, as Engineer of Work, etc., et al., Respondents.

      M. Tellefson, City Attorney, O’Melveny, Tuller & Myers and James L. Beebe for Petitioner.
    Clyde Woodworth for Respondents.
   SHENK, J.

The petitioner, the City of Culver City, presents its application for the writ of mandamus to compel the respondents, Engineer of Work and Superintendent of Streets, respectively, to prepare a diagram of the property included within Acquisition and Improvement District No. 3 of the City of Culver City, and to make an assessment, both as provided by the Refunding Assessment Bond Act of 1935.

Acquisition and Improvement District No. 3 of the City of Culver City was formed under the provisions of the Acquisition and Improvement Bond Act of 1925 as amended. (Stats. 1925, p. 849; Stats. 1927, pp. 1358, 1804, 1886.) The district lies partly within the City of Culver City and partly within the city of Los Angeles. Bonds of the district were issued in the principal sum of $50,580.60, bearing interest at seven per cent. They were issued to mature $2,800 annually in the years 1931 to 1948, inclusive. In February, 1938, unpaid principal on outstanding bonds amounted to $41,-980.60, of which $11,000 was past due. The interest due and unpaid was $11,569.12. The percentage of tax delinquencies had steadily increased annually to over eighty per cent. The petitioner, which had conducted the original proceedings, instituted a proceeding to refund the indebtedness of the district under the Refunding Assessment Bond Act of 1935. (Stats. 1935, p. 2023; Stats. 1937, p. 1675; Stats. 1938, Ex. Session, p. 73, ch. 13.) The total of the refunding bonds noticed to be issued is the sum of $35,000 to mature in ten annual instalments with interest reduced to six per cent.

The consent of all necessary parties was obtained and the proceedings duly progressed to the point where the respondents had refused to comply with the respective demands to perform the duties imposed upon them by the provisions of the act. As a return to the alternative writ the respondents have filed a general demurrer to the petition.

The ground of the refusal of the respondents to comply with the request to prepare a diagram and to make the assessment is that certain provisions of the Refunding Assessment Bond Act, as they apply to assessment districts lying within two municipalities, are unconstitutional. A general inquiry into the constitutional validity of the 1935 act was made and the act upheld in the ease of City of Los Angeles v. Aldrich, 8 Cal. (2d) 541 [66 Pac. (2d) 647], That case involved the validity of the act as applied to proceedings to refund the indebtedness of an assessment district lying wholly within the limits of the city of Los Angeles. In the course of the decision in that case (pp. 546, 547), we said: “It is urged that the act is void because it provides for a refunding proceeding involving more than one jurisdiction. Where the ad valorem assessment district extends into both incorporated and unincorporated territory, section 5 of the act designates the legislative body which conducted the original proceedings as the body to conduct the refunding proceedings. By section 24, at any tax delinquent sale which is held pursuant to the act, the county is deemed the real purchaser of delinquent property lying within unincorporated area and, as provided by section 25, must levy a limited tax not to exceed ten cents on each one hundred dollars of assessable property, to pay for the lands purchased or to be purchased at such tax sales. It is contended that this contemplates a gift of public money and a pledge of the county’s credit to a municipal corporation which has conducted the original proceedings in violation of section 31 of article IV of the Constitution. The same general answer might be made to this contention as is given in the foregoing cited cases, viz., that such funds are used for a public purpose, for which the county might have used them in the first instance, and are therefore used for the benefit of the county and not of a city or any individual. However, in the present case the improvement district does not extend beyond the territorial limits of the city. Any different answer which might be made to the question in a proper case, pursuant to the provisions of section 31 of the Refunding Assessment Bond Act of 1935 would not render the balance of the act unconstitutional.”

We are now met with a case involving the question there left open, namely, whether there is any constitutional infirmity in the application of the provisions of sections 24 and 25 of the act where the district lies within two or more jurisdictions.

By section 24 of the act the city or county is required at any delinquent tax sale to purchase the delinquent property and must pay into the bond redemption fund the amount of the delinquent assessment and interest. It is also required to transfer to the bond redemption fund the amount of any future assessment and interest pending redemption. Section 25 provides for a special tax levy, not to exceed ten cents on each $100 of assessable property; for the purpose of paying for the lands purchased, and for any such future assessment. The section then reads: “In the event that the district lies partly in unincorporated territory of the county and partly within one or more municipalities or lies within two or more municipalities, a certified copy of the resolution determining the amounts of the assessments remaining unpaid upon the security of which the refunding bonds are issued shall be filed . . . and for any such proceeding in which the lands assessed lie in more than one jurisdiction the auditor of the county in which the assessment district lies shall perform the duties imposed upon an auditor under this act and the tax collector of such county shall perform the duties imposed upon a tax collector under this ■ act. In case the lands assessed lie in more than one jurisdiction, in the event of the delinquency in the payment of any assessment levied hereunder and a sale to the state therefor, the county shall be deemed the real purchaser of all parcels sold which lie within unincorporated territory of the county and the city shall be deemed the real purchaser of all parcels sold which lie within the boundaries of the city, and each such city or county must make payment for the lands of which it is deemed the real purchaser, and if there are no available funds in the .treasury with which to make such payment the legislative body of such city or county must, at the time of fixing the annual tax rate and levying the taxes to be collected for general municipal or county purposes, as the case may be, levy a special tax upon the taxable property in such city or county, as the case may be, for the purpose of paying for the lands purchased or to be purchased at such tax sales, or for the purpose of paying instalments of the assessment or of interest which the city or county is required to pay under the provisions of section 24 hereof, but not to exceed for each district the bonds of which are refunded ten cents on each one hundred dollars of assessable value in such city or county, as the ease may be. Such special tax shall be in addition to all other taxes levied for municipal or county purposes and shall be computed, entered and collected in the same manner and by the same persons and at the same time and with the same penalties and interest as are other taxes of the city or county, as the case may be.”

It is urged that where, as here, territory in two cities is embraced within the assessment district, those provisions of the act are invalid which impose upon the county officials the duties to collect the assessments for the respective cities. It is alleged in the petition that both the city of Los Angeles and the City of Culver City have provided for the assessment and collection of city taxes by the assessor and tax collector of Los Angeles County. The 1925 act under which the district was organized also provided for the assessment and collection of taxes for the district by the county assessor and tax collector. We perceive no difficulty or invalidity by virtue of the similar provisions of the 1935 act referred to. The fact that the city or county, as the case may be, is required to purchase the delinquent property within its own confines, where the district is within more than one jurisdiction, does not transform into a strictly municipal affair that which was otherwise an affair of the district or a matter of general public concern. The designation of the purchaser at the delinquent tax sales merely specifies the source of the payment of the purchase price for the delinquent properties and is intended as part of the plan for maintaining the solvency of the bond redemption fund. Those provisions, as held in the Aldrich case, are valid. No invalidity exists merely in providing for the continuation of the assessment and collection of such t1axes by the county officials, where that service had previously been performed by them as provided by the act. Undoubtedly the legislature concluded that greater economy and efficiency would result by thus concentrating the performance of those duties.

The respondents next invoke section 11 of article I of the state Constitution. They contend that the act is lacking in uniformity of operation where the lands assessed under section 25 lie within more than one city. They argue that the imposition of the special tax levy upon the assessable property in each city will result in double liability. The respondents state: “ . . . each of said cities, if funds are not available fiy said purposes, must levy a special tax not to exceed for each district ten cents on each one hundred dollars of assessable value in such city. In other words, if the district lies within two municipalities the tax limitation is practically doubled. ’ ’

The respondents have apparently misapprehended the precise function of the ten-cent limitation. Uniformity in imposing the liability on each jurisdiction for the purchase of delinquent lands and payment of future delinquent instalments, is not disturbed by the fact that any rate of the special tax levy under ten cents might be different for each of the cities within the district. The rate obviously will vary for each city, depending upon the proportion of delinquencies to the total assessable property within the city. By the provisions of section 25 the legislature is not to be deemed to have imposed a tax, but as having placed a limitation upon the permissible special tax levy so that an excessive tax rate will not be imposed when the city without available funds is required to resort to the special tax levy, in order to meet its obligations as the purchaser of delinquent property. Contrary to the respondents’ contention the city’s liability is not doubled, but is uniform in the proportion that the amount of delinquency bears to the assessed value of all property in the city, as further restricted by the ten-cent limitation. The language used by the respondents—“must levy a special tax not to exceed for each district ten cents on each one hundred dollars assessable valuation in such city”, referring to the pertinent portion of section 25 hereinabove quoted—obviously relates to the situation where there is more than one district within the city, and not to the situation which the respondents have in mind, namely, where lands of the district lie within more than one city.

There is no constitutional objection in the advancement by the city of funds for the purpose indicated on the ground that the advancement amounts to a gift of public moneys or a pledge of the city’s credit. This question was decided in the County of Los Angeles v. Jones, 6 Cal. (2d) 695 [59 Pac. (2d) 489], and City of Los Angeles v. Aldrich, supra, and the cases therein cited.

The foregoing discussion also answers adversely to their contention the respondents’ claim that the provision for the special tax levy violates sections 12 and 13 of article XI of the state Constitution. Section 12 reads,,: “The legislature shall have no power to impose taxes upon counties, cities, towns or other public or municipal corporations, or upon the inhabitants or property thereof, for county, city, town or other municipal purposes but may, by general laws, vest in the corporate authorities thereof, the power to assess and collect taxes for such purposes. ’ ’ And section 13 provides: “The legislature shall not delegate to any special commission, private corporation, company, association or individual any power to make, control, appropriate, supervise or in any way interfere with any county, city, town or municipal ■ improvement, money, property, or effects, whether held in trust or otherwise, or to levy taxes or assessments or perform any municipal function whatever. ...”

The respondents’ theory apparently is that the effect of the provision for a special tax levy is the imposition of a tax by the legislature, or the delegation to county officials to levy municipal taxes. They concede that the county officials do not directly make the tax levy. The validity of the provisions of the act utilizing the functions of the county assessor’s and tax collector’s office in specified instances as agencies of the municipalities within the district, has hereinbefore been discussed and upheld. Moreover, it is sufficiently obvious without extended discussion that the pertinent provisions of the act were enacted pursuant to power vested in the legislature, that is, by general laws to authorize the appropriate officers to assess and collect taxes for specified purposes. (American Co. v. City of Lakeport, 220 Cal. 548 [32 Pac. (2d) 622].)

The respondents have advanced no valid ground for their refusal to perforin the duties imposed on them by law and herein specified.

Let the peremptory writ issue as prayed.

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


author: HOUSER, J.

text:
    [L. A. No. 16626.
    In Bank.
    June 29, 1938.]
    UNION TRUST COMPANY OF SAN DIEGO, Petitioner, v. THE SUPERIOR COURT OF SAN DIEGO COUNTY et al., Respondents.

      Stearns, Luce, Forward & Swing for Petitioner.
    C. J. Novotny for Respondents.
   HOUSER, J.

From the record herein, it appears that on August 14, 1931, as the outcome of a foreclosure suit that was brought by Union Trust Company against C. J. Novotny, the plaintiff therein became entitled to a deficiency judgment in the sum of $1744.27. Some years thereafter Union Trust Company instituted another and separate action against the same defendant for the purpose of recovering from him a separate judgment for the amount of the said deficiency. At the same time when the defendant answered to the complaint in the latter action, he also filed a cross-complaint and a counterclaim against Union Trust Company, wherein the said defendant sought to recover damages from Union Trust Company, alleged to have resulted to him by reason of the asserted negligence and the fraud committed and perpetrated respectively by it with respect to a specified trust which theretofore had been administered by Union Trust Company in behalf of the said defendant, as the owner of all the stock of Prudential Bond & Mortgage Company, a corporation. At a time shortly before the date that had been fixed for the trial of the latter action, at the instance of the defendant therein, the trial court made its order, in effect that the said defendant be permitted by the said plaintiff to inspect its several books of account and its various records that had been prepared, made, kept or maintained by it in connection with its administration of the said trust. On the ground that such order was violative of its constitutional rights, particularly in regard to what popularly is known as “search and seizure”, the plaintiff refused to comply with the said order. Thereupon, of its own motion, and in the absence of the pursuit of an available if not more drastic proceeding, the trial court vacated its former order by which the cause had been set for trial and contemporaneously therewith, in substance, ordered that no trial of the action be had until at least thirty days had elapsed after the defendant in said action had been permitted by the plaintiff to inspect the said books and records. In such circumstances, at the solicitation of the plaintiff, the District Court of Appeal directed the issuance of its peremptory writ of mandate, by which, in effect, the trial court was required to vacate its former order which related to the time when trial might be had, and thereupon to set the cause for trial. On the petition of the defendant in the action, a hearing of the matter, after the decision therein by the District Court of Appeal, has been granted by this court.

It is obvious that a decision regarding the legality of the order of inspection that was made by the trial court will be decisive of the main question that is presented for consideration herein.

Aside from the rules obtaining in equity which appertain to the relief ordinarily available to a party by the procedure known as a bill of discovery, both parties to this proceeding concede that in proper circumstances the general privilege accorded to either party to an action to inspect material and pertinent entries of accounts or documents in the possession or under the control of the other party is largely influenced by the statutory provisions that are contained in section 1000 of the Code of Civil Procedure.

Broadly speaking, the objection that is here presented with regard to such inspection, relates to the sufficiency of the means that was adopted or practiced by the defendant in his endeavor to comply with the procedural method that either is demanded by the terms of the statute, or that which is impliedly required by judicial construction thereof. Ordinarily, when clear and specific, naturally it might be anticipated that the former source of enlightenment would be controlling; but at least in the absence of such clarifying conditions, the latter becomes paramount. In that regard it may be noted that in each of several adjudications which heretofore have been made by the appellate tribunals of this state it has been declared that as a foundation for the legality of the making of an order of inspection, two separate, indispensable requirements must be made to appear: (1) that the books, or the paper, or the document that is sought to be inspected contains evidence that is material to an issue which is involved in the action or the proceeding with relation to which the order is proposed to be made; and (2) that the order by which such inspection may be authorized be so specific in its terms with reference to its designation or description of such book, paper, or document that it may be readily identified. (Kullman, Salz & Co. v. Superior Court, 15 Cal. App. 276 [114 Pac. 589]; Shell Oil Co. v. Superior Court, 109 Cal. App. 75 [292 Pac. 531].)

With respect to the first requirement, it is to be noted that the sufficiency of the defendant’s pleading, by the terms of which the allegations of both the negligence and the fraud of Union Trust Company in the administration of the trust was tested by a demurrer that was interposed by the latter to such pleading, and that the ruling that was made by the trial court thereon was unfavorable to the said plaintiff. Therefore, in that regard, with reference to the foundation for the making of the order of inspection (as far as the element of materiality is concerned), it may be assumed that such order is not subject to legal criticism, particularly when the allegations of the supporting affidavit are examined. It appears that the affidavit, by reference thereto, incorporated all the allegations that were contained in the cross-complaint and the counterclaim which were filed by the defendant, among which allegations were the following:

“ . . . with the consent and approval of plaintiff’s officers and directors (the plaintiff) fraudulently used such escrow funds in buying and dealing in the stocks of plaintiff corporation and its said associated and subsidiary corporation, as plaintiff is informed and believes;
“That in the furtherance of such purposes plaintiff misappropriated to itself and paid to itself under the fraudulent guise of fees large sums out of the funds of said trust belonging to defendant and said Prudential Bond & Mortgage Co., his assignor; that such payments and misappropriations were made to itself fraudulently and without right notwithstanding that defendant paid plaintiff the full sum agreed upon in full payment of all services rendered and to be rendered by plaintiff, but plaintiff nevertheless took further large sums in excess of the sum of $1,000 in alleged payment of services already paid for by defendant;
“That plaintiff (defendant) is informed and believes that since the maturity of said bonds plaintiff has fraudulently and unlawfully paid to itself and converted to itself further sums belonging to said trust and defendant in excess of the sum of $5,000 in addition to the full and reasonable value of all services rendered since such maturity;”

In addition thereto the cross-complaint and the counterclaim, as well as the affidavit, contained many other equally cogent allegations with respect both to the alleged negligence and the fraud of the plaintiff in the administration of said trust, from which the materiality of evidence that properly should appear in the books, records and documents which presumably were kept by the plaintiff and which were in its possession or under its control becomes readily apparent. In determining the question of materiality of the records sought to be inspected, the trial court was not limited to a consideration of the affidavit, but also was entitled to consider the contents of the pleadings filed in the case which showed, or might show, the materiality of the evidence sought to be obtained. (Maclay Rancho Co. v. Superior Court, 81 Cal. App. 471 [254 Pac. 287].)

With regard to the scope permitted a trial court in the exercise of its discretion in the matter of determination of the question of the asserted “materiality” of books and records sought to be inspected by a party litigant, the following cases are pertinent: In the case of Main v. Ring, 219 Iowa, 1270 [260 N. W. 859, 862, 863], which also was an action involving the issue of fraud, the court said, “ . . . The action, as previously noted, is for damages for deceit. One of the questions made by the pleadings is whether the defendant is guilty of fraud, . . . Obviously, anything which would throw light on these questions would be material. No nice discrimination on the question of materiality should be attempted in a situation of this kind. . . . The trial court determined the papers were material. . . . The presumption should be that the court acted within its proper jurisdiction. . . . The statute is clearly designed to help a party to a suit to discover material facts even though the documents evidencing such facts are in the possession of the adverse party, and it is a wholesome aid to the proper administration of justice.” And in the case of Dalton v. Calhoun County Dist. Court, 164 Iowa, 187 [145 N. W. 498, Ann. Cas. 1916D, 695], where it was claimed that the application for the order (for inspection) failed to show affirmatively the materiality of the evidence sought to be adduced, the court said, “ . . . The application . . . did not in terms state that the books were material, but it did state in detail what was expected to be proved from them . . . and if material such was sufficiently shown by the pleadings in the main case, and by the application for the production of the books, even though such fact was not expressly averred.”

Nor, with respect to the second requisite, considering the facts here presented, may it properly be declared that the books and records as specified were not sufficiently identified in the order that was made for their inspection. As hereinbefore has been indicated, it should be noted that the order in question was made pursuant to notice that was given to the plaintiff that application for such an order would be made. Moreover, on the hearing of such application, the plaintiff, represented by counsel, was present and then and there was fully apprised not only of the contents of the supporting affidavit in behalf of such proposed order, but also with the contents of the pleadings, which b5r reference had been incorporated within such affidavit. The pertinent terms of the order were: “It is hereby ordered that the plaintiff give to the defendants forthwith an inspection and copy or permission to take a copy of the entries of account and of the documents and papers mentioned in the affidavit of C. J. Novotny sworn to on May 19th, 1937, excepting those certain documents and records mentioned in said affidavit. ...” In the foundational affidavit thus referred to, the books, records and documents which assumedly had been kept by or which were under the control of the plaintiff were described as:

“All entries in all of plaintiff’s cash books, day books, journals, trust records and other books and records relating to trust No. 5771 and the trust agreement made and entered into by and between said plaintiff and the Prudential Bond & Mortgage Co. on or about July 15, 1919, the assets of said trust and all properties, mortgages and securities transferred and assigned to plaintiff or received or held by it under or in connection with said trust and agreement; . . .
“All appraisements of all properties mentioned in and covered by the mortgages and securities conveyed and assigned or caused to be conveyed, transferred and assigned to plaintiff by said Prudential Bond & Mortgage Co. or in its behalf;
“All entries in said books relating to fees taken, received or claimed by or paid to plaintiff in connection with said trust and agreement and the mortgages and other securities received by plaintiff under said trust or in connection therewith ;
“All entries in all of said books relating to the receipt of, deposit of and disbursement or payment of escrow and other funds received by plaintiff from said Prudential Bond & Mortgage Co.; . . .
“Documents, papers, instruments and instructions signed by said Prudential Bond & Mortgage Co. or said C. J. Novotny relating to the affairs, assets and securities of said trust and said Prudential Bond & Mortgage Co. and the management thereof. ’ ’

Furthermore, with reference to the assertion that such books, records and documents which were sought to be inspected by the defendant were not sufficiently identified, it is clear that if in administering the trust to which the defendant referred in his cross-complaint and his counterclaim, the plaintiff pursued even the ordinary course of business, it would have kept a set of books of some description (Hotchkiss v. Levi, 140 App. Div. 525 [125 N. Y. Supp. 462]); and presumably it preserved at least either the originals or copies of all important documents which were directly related to the administration of such trust.

The matter of obtaining an inspection of documents in a case where it is obvious that the rights of a party may depend upon its proper exercise, manifestly should not be regarded “as a game”, having fixed rules that must be literally and punctiliously observed. “Literal accuracy cannot be expected in the description of a paper in the possession of the adverse party; such description as will apprise a man of ordinary intelligence of the document desired is enough.” (Burke v. Table Mountain Water Co., 12 Cal. 403.) It is apparent that, in reason, all that should be required of a party litigant in his endeavor to obtain an inspection of records which are pertinent to his cause and which he is or should be entitled to examine, is that in his attempt to do so, he describe them with such certainty only as will or should reasonably apprise his legal opponent, or the custodian of such records, of that which may be desired. If that be done, the fact that such description or designation of such records may appear to be faulty, deficient, uncertain or unintelligible to persons other than those who may be directly concerned in the compliance with an order by which an inspection may be directed or permitted, is of no consequence in a proper ease, and on that account cannot be available to defeat the right of inspection. "Whether the description of records is sufficient to inform their custodian of that which is desired, presents a question merely of whether under the circumstances and situation generally, considered in the light of reason and common sense, he ought to recognize and be able to distinguish or identify the particular thing that is required. In the instant matter, whether in the defendant’s affidavit or in the order that was made by the trial court with reference to the defendant’s right of inspection, if the several books, records or documents were, or either of them was not described in accordance with the plaintiff’s appellation of them or any or either of them, that fact should not be deemed either determinative or as in anywise affecting the right of the defendant to inspect them. Nor, under the circumstances of this case, may the technical objection be available that the order was too broad. The same objection was made in the ease of Gables Racing Assn. v. Persky, 116 Fla. 77 [156 So. 392, 395], and while under the facts of that ease, the court held that the order should be modified, it made the following statement relative to the validity of such order: “While many more boobs, papers, and documents were required to be produced than the pleadings in the case seemed to require, and the order might have been with more propriety limited to such necessary papers and boobs as were likely to give some information to the court upon the question presented by the pleadings, we cannot say that the chancellor abused his discretion to the point of invalidating the order.”

In the instant case, it was the plaintiff’s duty in the premises to comply with the order of the court as far as, it was able in reason and good faith to ascertain the intent and meaning of the order here made. With regard thereto, it may be said at this point that the arbitrary refusal on the part of the plaintiff to comply with the order in question, based as it was upon technical objections, does violence to the spirit and intent of the statute under which the right of an inspection is conferred. It should be remembered that the purpose of a “discovery” is to assist in the administration of justice, and that the statutory right of inspection is based upon, and relates back to, ancient principles of equity.

In Pomeroy’s Equity Jurisprudence, fourth edition, volume I, sections 190-195, at pages 260, 262, 267 and 273, in tracing the early history of discovery the author makes the following observation:

“The rules of the ancient common law concerning the competency of witnesses were exceedingly arbitrary, and would often work great injustice, unless their defects had been supplied by the equitable jurisdiction. In the common-law courts, prior to the modern statutory legislation, a party could not be examined as a witness, nor forced to make admissions in his pleadings, in behalf of his adversary; nor was there any means in the common-law procedure of compelling a party to produce, or submit for inspection, or furnish copies of any documents or books which might be in his possession or under his control, however important they might be to the other party’s cause of action or defense. It was to supply this grievous defect in the ancient common-law methods that equity established the first branch of its auxiliary jurisdiction, called discovery. . . . The suit for discovery, properly so called, is a bill filed for the sole purpose of compelling the defendant to answer its allegations and interrogatories, and thereby to disclose facts within his own knowledge, information, or belief, or to disclose and produce documents, books, and other things within his possession, custody, or control . . . Modern legislation has greatly interfered with the practical exercise of the auxiliary jurisdiction for a discovery, by introducing simpler and more efficacious methods in its stead, and by thus rendering a resort to it unnecessary and even inexpedient . . . the principles and doctrines relating to discovery, which have been settled by courts of equity, and which determine what facts parties can be compelled to disclose, and what documents to produce, and under what circumstances the disclosure or production can be obtained, will still continue to be recognized by the courts, and to regulate their action in enforcing the examination of parties and the production of writings by means of the more summary statutory proceedings. ... As this auxiliary jurisdiction was contrived to supply a great defect in the ancient common-law methods, which was a constant source of wrong to suitors at law, and as it was intended to promote right and justice, discovery was, from the outset, favored by courts of equity.”

But there is another and perhaps equally cogent reason why the issuance of the order in this case was not improper. As hereinbefore has been noted, the parties to this litigation stood in the relation of trustor and trustee respectively, one to the other. When such a situation appears, the ordinary strictness of the rule relating to the right of inspection is greatly relaxed. The courts have repeatedly declared that in such circumstances, almost “as a matter of course”, the trustor or the beneficiary has a right to a full and complete inspection of all books and records with relation to the trust; and the defendant here asserts that because of the instant trust relationship, many of the documents (trust agreement, appraisements, accounts of receipts and disbursements, as well as records of the assets of the trust) are as much the property of the defendant as they are of the plaintiff.

With respect to the general rule which is applicable in such situations, in 18 C. J., page 1117, it is declared that:

“A production or inspection of books and papers will be granted where the applicant has a special interest or right in them. Thus in an action between partners production and inspection of the partnership books will be ordered almost as a matter of course when such production and inspection is sought by one of the partners. So production and inspection will be required of books kept by an executor, or trustee, where the inspection is sought by a person interested in the estate of the decedent or by a beneficiary of the trust. . . . In short, production and inspection will be granted of all books and documents in which the parties have a common interest.”

Also, in the case of Hotchkiss v. Levi, supra, where it was held that the request for an order of inspection should have been granted, the court said, ‘1 The allegations with respect to the keeping of books and records by the firm and the contents thereof are, it is true, made on information and belief. In the ordinary case this would be insufficient. . . . Here, however, the application is for a discovery and inspection of the books, records, and papers of agents and joint venturers, and it may fairly be presumed that a firm of stock brokers engaged in such an enterprise would keep books and records thereof, and it is not denied that they did keep them and that the plaintiff has them and has refused to permit the defendant to inspect them. ’ ’

In the instant case, it also may be noted that although the affidavit which was presented by the defendant in support of his motion for an inspection of the records was more than ordinarily replete with respect to a statement of facts, nevertheless the plaintiff made no denial of such facts. In that connection, the rule is thus laid down in the case entitled Alabama Girls’ Industrial School v. Reynolds, 143 Ala. 579 [42 So. 114, 115], as follows:

“But, when both parties have an equal right to the examination and inspection of documents and books of account, as in cases of partners, and books kept by a trustee of the trust account, and of documents acquired in a trust relation, which have to do with a pending suit between such parties, the rule is different, and the court will on application of either party order their production for inspection at any stage of the suit to enable him to prepare his case (citing cases) . . . It is not contended but that these books of account contain evidence material to complainant’s case. ... So a trustee is bound to render every necessary information required of him, and when he is called to account he will be compelled to produce all the books, papers, writings, vouchers, and other documents which are in an)»- way connected with the trust, and which are in his possession or under his power. 2 Bates on Fed. Eq. Prae., sec. 762.” (See, also, Stebbins v. Harmon, 17 Hun (N. Y.), 445, Livingston v. Curtis, 12 Hun (N. Y.), 121, and In re Smathers’ Will, 152 Misc. 774 [274 N. Y. Supp. 109].)

In effect, it is stated in Corpus Juris, volume 18, page 1116, that the enactment of statutes relative to the remedy of obtaining evidence by inspection was had with a view to provide a more speedy and less expensive remedy than by the proceedings in chancery; that they ‘ ‘ are remedial in their nature and should be liberally construed”.

That the trend of judicial decisions is to relax the rules which relate to the taking of evidence by ancillary proceedings, of which the inspection of documents is one method, to the end that the trial of actions may be expedited and justice be more efficaciously and speedily administered, is reflected in many modern decisions, some of which are here noted.

In the case of Wheeling Steel Corp. v. American Rolling M. Co., 82 Fed. (2d) 97, although holding that the necessity for resort to discovery must be established, and under the facts of that case denied the right thereto, the court stated that “ . . . equity favors discovery as an aid to simplifying the issues and expediting the trial of suits at law”, and that “the trend of modern legislation in respect to the examination of documents and records prior to trial has had the same objective”. And in the case of Iroquois Hotel & Apartment Co. v. Iroquois Realty Co., 126 App. Div. 814 [111 N. Y. Supp. 172], it was said, “A right of inspection of books and papers is . . . expressly given by the Code to a defendant where they affect the merits of the defense, and this defense need not necessarily be an affirmative one. Such inspection may greatly facilitate the trial and relieve the court from much detail, as well as apprise the parties so they (may) meet the particular dispute involved, and should be granted where a proper case is disclosed.” Also to the same effect is the language used by the court in the case of Main v. Ring, 219 Iowa, 1270 [260 N. W. 859], where it was said, “ ... in the consideration of the question (of jurisdiction of the court to make the order) ... a broad and liberal construction of the pleadings must be adopted and all the allegations of the petition must be considered”. And in the case entitled Sinclair Refining Co. v. Jenkins Petroleum Process Co., 289 U. S. 689 [53 Sup. Ct. 736, 77 L. Ed. 1449, 88 A. L. R 496], a bill for discovery in advance of trial (under the equity rules, however), to obtain the disclosure of general facts as to the defendant’s use of an invention, in an action at law for damages for alleged breach of agreement, was held to be proper. There the United States Supreme Court, speaking through Mr. Justice Cardozo, made the following pertinent statement:

“Help for the solution of problems of this order is not to be looked for in restrictive formulas. Procedure must have the capacity of flexible adjustment to changing groups of facts. The law of discovery has been invested at times with unnecessary mystery. There are few fields where considerations of practical convenience should play a larger role. The rationale of the remedy, when used as an auxiliary process in aid of trials at law, is simplicity itself. At times, cases will not be proved, or will be proved clumsily or wastefully, if the litigant is not permitted to gather his evidence in advance. "When this necessity is made out with reasonable certainty, a bill in equity is maintainable to give him what he needs. Equity rule 58. There were other reasons in times past, when parties were not permitted to be witnesses, and when there was no compulsory process for the production of books or documents (citing cases). Today the remedy survives, chiefly, if not wholly, to give facility to proof.”

Particularly with reference to the contention of thq plaintiff that the order was too broad in scope, and in effect that it would permit the defendant to indulge in a so-called “fishing expedition” among the plaintiff’s books and records, and therefore that such order was violative of its constitutional right to be secure against “unreasonable search and-seizure”, in the light of what has been said hereinbefore, it is clear that such claim is without merit. In substance, it has beeh declared by many judicial tribunals that the asserted right in this regard is limited by a determination of whether the proposed search and seizure would be unreasonable. It is manifest that by the enactment of the constitutional guaranty here under consideration, it was not intended that the inherent power of the courts to elicit evidence in the trial of an action should be either unreasonably impaired or abrogated, but that in the exercise of such authority, judicial tribunals should be limited only by that which might constitute in each instance an “unreasonable” search or seizure. (State v. Anderson, 270 Mo. 533 [194 S. W. 268, L. R. A. 1917E, 833].) Furthermore, in the case of Dalton v. Calhoun Dist. Court, 164 Iowa, 187 [145 N. W. 498, Ann. Cas. 1916D, 695], where this protective provision was urged as a bar to the issuance of an order of inspection, it was stated that as a rule the provision “has reference to criminal or gum-criminal proceedings, or to forfeiture and not the statutory methods for obtaining evidence”. The court, in the latter ease, went on to say that, “ ... we must presume that the trial court in exercising the discretion granted to it in such matters, and in the fairness which may be expected to control its acts in the matter, will permit no examination or discovery not necessary to the ease, nor want in proper regard for the rights of both litigants V.

In every ease, much must necessarily be left in the first instance to the sound discretion of the trial judge.

From that which hereinbefore has been said, it follows that the alternative writ hereinbefore issued should be discharged, and that a peremptory writ should be denied. It is so ordered.

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


author: THE COURT.

text:
    [Crim. No. 4153.
    In Bank.
    June 30, 1938.]
    In the Matter of the Application of WILLIAM WALKER for a Writ of Habeas Corpus.

      John W. Preston, Irwin H. Roth, Edgar B. Hervy, John T. Holt and Preston & Preston for Petitioner.
    Pierce & Sherwin and Morris Lavine, as Amici Curiae, on Behalf of Petitioner.
    Buron Fitts, District Attorney, and Alexander H. Van Cott and Jere J. .Sullivan, Deputies District Attorney, for Respondent.
   THE COURT.

This is a petition for a writ of habeas corpus.

Petitioner was charged with a violation of section 337a, subdivision 3, of the California Penal Code, making it a crime to receive, hold, or forward a sum of money or other thing of value, to be placed as a bet. The stipulated facts show that on December 29, 1937, in the city of Los Angeles, the complaining witness solicited petitioner to place a $2 bet on a certain horse in a race' to be run at the licensed race track at Santa Anita, California. . Petitioner agreed to do this, and charged a fee of 10 per cent, or 20 cents, for this service. Thereafter petitioner telephoned his representative in the vicinity of the race track, instructed him to place the bet, and the representative went within the enclosure and purchased a ticket which entered the bet through the pari-mutuel machine. When the race was run, petitioner informed the complaining witness of the result, and was thereupon arrested. At the preliminary hearing, he was held for trial, and sought this writ.

Petitioner is obviously guilty of a violation of the terms of said section 337a (3) of the Penal Code. The question before us is whether that section is operative under the facts set forth above, or whether it is inapplicable by reason of the provisions of the “Horse Racing Act” of 1933, as amended in 1935. (Deering’s Gen. Laws, Act 3421.)

The said statute provides for licensed horse racing, and establishes a regulated form of wagering on races under what is known as the “pari-mutuel” system, the bets being placed through the pari-mutuel machine or “totalisator” located inside the race track enclosure. A legal wager could be made under the act only through the machine, within the enclosure, and only on the dates for which horse racing is licensed. Where the conditions laid down by the act are followed, wagering on horse races is legal, and therefore the statute creates an exception to the general prohibitions contained in the Penal Code. But the act does not purport to repeal section 337a of the said code. In section 3 of the act it is stated: “All other forms of wagering or betting on the result of a horse race shall be and remain illegal and any and all wagering or betting on horse races outside the enclosure where such horse races shall have been licensed by the board shall be and remain illegal.” Section 15 similarly declares that all other forms of wagering shall be punishable as provided in the Penal Code. (See People v. Torrey, 16 Cal. App. (2d) 470 [60 Pac. (2d) 900]; In re McKelvey, 19 Cal. App. (2d) 94 [64 Pac. (2d) 1002].) It seems clear, in general, that the act contemplated the legalizing of a specified type of regulated wagering by spectators at the races, and as incidental to the supposed social and sporting interest in the actual races. It is equally clear that there was no intention to authorize bookmaking or betting at pool-rooms or other establishments, as a purely gambling venture, away from the track. The argument to the voters, submitted at the time the measure was presented for popular vote, stated: “Wagering will be confined to licensed race track enclosures—thus aiding in the elimination of pool rooms and such other undesirable places. ’'

In 1935, however, an amendment was enacted, adding the following to section 3. “A wager made inside an enclosure under the pari-mutuel system for a principal who is not withi/n, the enclosure shall be considered a wager made within the enclosure for the purpose of this act and any activity of the principal in connection with such wager shall not be considered a wager made outside the enclosure.” It is upon this amendment that petitioner relies. The meaning of the amendment is not at all clear. Its purpose seems to be to permit betters to place wagers without actually coming to the track to see the horse race. The better, called a “principal” in the amendment, may apparently telephone or telegraph his bet, or otherwise forward directions with someone who attends the race, or to someone who is inside the enclosure, who then makes the wager through the machine in a lawful manner. The amendment provides that the “principal”, that is, the man who makes the wager, may do this, and any activity by him is not to be considered an illegal wager.

But what of the person to whom the directions are given, the agent of the better? The amendment is silent as to him. It legalizes the activity of the “principal” only. However, if the agent is actually located within the enclosure and places the bet there, he would seem to be actually legally within the provisions of the entire statute, for if an absent principal may make a bet, and a bet is legal when placed within the enclosure, the activity of the agent in placing it there cannot be criminal. This much we may concede from te language of the original statute taken together with that of the amendment.

But the conduct of petitioner goes one step further. Instead of an agent of the principal at the track, we have an agent of the agent there. The same thing is accomplished, namely, the placing of a bet for an absent principal. But a new element has entered: the agent is not at the track but is located in any place, no matter how distant, and he himself has a subagent at the track to place the bets. Petitioner argues that what the principal may do himself, he may do through an agent, and that an agent may under ordinary circumstances delegate his duties to a subagent. This may be perfectly true as a matter of the general law of agency, but it does not solve the problem presented here with respect to the scope of this statutory exception to our general gambling-laws. Under petitioner’s view, commercialized gambling conducted away from the track would be permitted to flourish. Individuals could establish betting centers anywhere, solicit, and place bets in any amount, so long as they communicated the amounts to the track and had the bets placed there through the machine. If this was the purpose of the amendment, it radically changed the original statute and eliminated most of the protective regulations designed to prohibit widespread commercial gambling on horse races. Before such an interpretation can be upheld, the statute must clearly compel it. The statute before us does not. The only thing clear about the amendment is that the principal or better does not commit any crime. But the actions of the commercial solicitor of bets, operating outside the track, receiving bets from others and never placing them himself in the manner authorized by the law, do not come within the protection of the 1935 amendment. This being so, those acts are punishable under the provisions of the Penal Code.

These views are in accord with those reached by the District Court of Appeal in In re Goddard, 24 Cal. App. (2d) 132 [74 Pac. (2d) 818], wherein it appeared that the petitioner conducted a business at a particular place for the purpose of accepting wagers on commission, and having them placed by his employee within the enclosure. In that case the court said (p. 825) : “Section 3 of the Horse Racing Act, as amended, affords no defense for one who maintains and operates, as petitioner herein maintained and operated, an establishment outside the track enclosure for the purpose of aiding, soliciting, encouraging and promoting commercialized gambling upon the results of races at which neither he nor his so-called ‘principal’ are spectators. The claim, therefore, that such conduct and acts are within the purview of the Horse Racing Act is a mere subterfuge and an attempt to circumvent the established policy of the state against commercial gambling, and is without legal sanction either in the Horse Racing Act as originally adopted or as subsequently amended. ’ ’ Although the stipulation in the instant ease does not disclose that petitioner maintained a place of business for his operations, and only one act of soliciting is charged herein, we see no material difference, in so far as the present statute is concerned, between soliciting bets on the street or in a shop, for in each case the acts of the agents take place outside the enclosure.

The writ heretofore issued is discharged and the petitioner remanded to custody of the sheriff of Los Angeles County.

Rehearing denied.


author: LANGDON, J.

text:
    [L. A. No. 16272.
    In Bank.
    June 30, 1938.]
    WHITTIER MUTUAL ORANGE & LEMON ASSOCIATION (a Corporation) et al., Respondents, v. AGRICULTURAL PRORATE COMMISSION OF THE STATE OF CALIFORNIA et al., Appellants.

      U. S. Webb, Attorney-General, Walter L. Bowers and Alberta Belford, Deputies Attorney-General, and Edson Abel for Appellants.
    Jennings & Belcher, Bruce McDaniels and Louis E. Kearney for Respondents.
   LANGDON, J.

This is an appeal from a judgment of the trial court holding invalid the formation of a lemon prorate district under the terms of the Agricultural Prorate Act (Stats. 1933, p. 1969), as amended; Deering’s General Laws 1937, Act 143a, p. 60). The nature of the act was fully considered, and its constitutionality upheld, in our prior opinion, Agricultural Prorate Commission v. Superior Court, 5 Cal. (2d) 550 [55 Pac. (2d) 495],

On March 28, 1935, a petition, signed by a number of persons seeking the institution of a system of prorated'marketing of lemons grown in the state, was filed with the Agricultural Prorate Commission. After a hearing, the petition was granted, and a zone or district covering the entire state was formed, a prorate program was established, and defendant Shippey was appointed zone agent to administer the program. On May 8, 1935, this action was instituted by various lemon growers and shippers against the commission, its members and the prorate committee, to enjoin the enforcement of the act. A temporary injunction was granted by the trial court, whereupon an alternative writ of prohibition was issued by this court. Upon consideration by this court the act was held constitutional, but the cause was sent back to the trial court for the determination of the question whether the petition for formation had been signed by the requisite number (two-thirds) of the lemon producers. (Agricultural Prorate Commission v. Superior Court,.supra.) In the subsequent trial, the record of which is quite voluminous, this issue of fact was tried, and the court gave judgment permanently enjoining defendants from enforcing the prorate program on the ground that the statutory requirements had not been followed. Defendants appealed. Since the constitutionality of the act has been fully settled by our prior opinion, we shall consider only the attack on the procedure taken under it.

This attack centers around section 11, which provided that the petition shall be sufficient if signed by “twotliirds or more of the producers of the commodity named in the petition within the zone described and by the owners of two-thirds or more of the producing factors in said zone”. (Subsequent amendments have changed this provision, but the above language ■ applied at the time the present district was formed.) A double requirement is- made by this section-: there must be the requisite number of individual lemon growers, i. e., the producers, and also the requisite number of owners of the units or factors of production. In other words, a large number of individuals who produced only a small amount of lemons could not force the institution of a prorate program; nor could a few large producers, controlling the major part of the production, do so against the wishes of the greater number of smaller producers. The act requires a concurrence of two-thirds of the producers, and of those persons who control two-thirds of the production. Plaintiffs contend, and the trial court found, that the petition was defective in both requirements.

The first and major ground of invalidity found by the lower court is that the petition was not signed by the requisite number of owners of producing factors, the theory of the decision being that the petitioners failed to choose a proper factor. In this connection it may be observed that the term “producing factor” is not of fixed and certain meaning, and that various kinds of units of production, such as acreage, bearing trees, etc., could reasonably be considered to fall within its scope. It was intended, as already pointed out, to furnish a measure of production. The act, section 2, subdivision (h), provided at this time: “The term ‘producing factor’ means the unit of production specified in the petition.” Any unit selected by the petitioners, which reasonably measures production, must be considered sufficient. In the instant case the unit chosen was “a standard packed box of lemons” of the previous season. The petition was filed in the early spring, before any substantial part of the new crop had been harvested, and the actual production of the previous season was taken as more satisfactory than a mere estimate of the new year’s production. That the owners of more than two-thirds of the standard packed boxes of lenfbns produced in the previous year really represent approximately that quantity of the present year’s production can hardly be successfully disputed, and the record does not contain any evidence tending to show that the unit was not, in fact, a fair one.

The sufficiency of the packed box of lemons as a producing factor was, indeed, declared in our prior decision. We said there (5 Cal. (2d) 585 [55 Pac. (2d) 495, 513]): “From the definition given in the act of the term, ‘producing factor’ as ‘a unit of production’, we think it well may mean some definite part of that which is produced, and that in specifying such unit of production as a packed box of lemons the petition was within and complied with the terms of the act.” We also held in that opinion that the specification of the previous year’s crop was a proper method of determining the production, since it offered definite and not uncertain data: “ ... the plan adopted was fair and just to all growers. It worked for certainty and definiteness, and in most respects was preferable to a procedure depending upon the uncertain method of a mere estimate of what might be produced during the current year. This resort to the previous year’s crop was only had for the purpose of fixing some basis upon which to institute proceedings for the formation of the district. The previous year’s crop did not enter into the future acts of the committee in prorating crops thereafter to be produced and made the subject of proration. The pro-ration of any future crop would be governed entirely by the amount of such crop and the individual production of each' grower. ’ ’

Notwithstanding our expressions on this point, the trial court was of the opinion that the petition failed to comply with the law. In the prior hearing before this court, it was argued that a packed box of lemons is not a “producing factor”, such as a tree or acre of land, but is a "produced factor”, and cannot fulfill the statutory requirement. This insistence upon a strict and literal meaning, ignoring the broad statutory definition of the producing factor as a "unit of production”, in an effort to defeat the purpose of the act, was rejected by our first decision. We again affirm the holding that a packed box of lemons is a unit which may measure the production of lemons, and though counsel have again argued the point, the lower court conceded that it was a closed issue. But the court observed that our holding was ineffective because the statute required signatures of the owners of two-thirds of the producing factors in the prorate district. Obviously the bulk of the past season’s production had been sold and shipped out of the state at the time the petition was filed. A few boxes remained unsold within the state, in storage with packing associations, but the court held that the evidence was insufficient to show the ownership of these boxes. Hence, the court concluded, there was no proof that the owners of the producing factors within the state at the time of the petition were the signers thereof.

At the outset it may be said that this objection is highly technical, and has no relation to the objects of the act. So far as the statutory purposes are concerned, the petition is in full conformity, for it is not denied that the producers of the major' portion of the crop are seeking the adoption of a proration plan. Moreover, to adopt the theory of the plaintiffs would mean that the signers could be the owners of the small residue of lemons remaining unsold at the time of the petition, which would defeat rather than carry out the statutory aim. Inasmuch as the whole object of the choice of a particular producing factor is to see that it represents the production of the commodity, the statute can only be satisfied when a unit is chosen which does so. And there is no express statement therein that those producers, determined by the last season’s production under the present plan, shall have actual possession or ownership of the individual units of pro-' duction at the exact time of signing. The signers were then and are now the bulk of the lemon producers of the state. They were owners of more than two-thirds of the packed boxes for the previous year, and without doubt would produce and own more than two-thirds in the subsequent year. Under these circumstances we think the statutory requirement was substantially fulfilled in this respect.

It is therefore unnecessary for us to consider at length the strong evidence produced by defendants to show that more than two-thirds of the small residue of unsold boxes left in the state at the time the petition was signed were actually owned by the signers.

The second ground of attack is that the prorate program is based upon the amount of fruit in storage, instead of on production, and that this violates the statutory requirements. The court below recognized that the storage count was perhaps the most effective means, and that it might be impracticable to prorate on the basis of harvesting, but it held, nevertheless, upon an analysis of the statutory provisions, that it compelled the latter and did not permit the former. The argument is that under the statute the grower may not harvest a commodity unless he has first secured a “secondary proration certificate”, and that under the lemon proration plan he would not receive a secondary certificate until his fruit was harvested and placed in storage.

Here, again, it seems to us that a strained construction has been employed, without adequate consideration of the obvious purposes of the statutory language. Section 18 gives the committee power to determine the method and manner of prorating, and section 20 provides that secondary certificates “shall be used to control the time and volume of harvesting or other preparation for disposal”. Section 20 then states: “It shall be unlawful for any commodity to be harvested, prepared for market and/or marketed unless and until there shall have been an appropriate secondary certificate issued therefor ...” Bearing in mind the objective, namely, an effective and practical method of proration, we cannot ascribe to the legislature the absurd aim of preventing harvesting until a certificate is issued, but withholding a certificate until storage after harvesting. It is quite clear that a flexible authority was intended, to permit the granting of the certificates at any stage in the production of the particular commodity which would permit the most effective regulation. If, in the case of some commodities, the time of harvesting appears to offer the best opportunity to enforce the regulation, the proration plan could provide for secondary certificates to be issued at that time to control the “harvesting” (section 20). If, on the other hand, the time for effective control was the time the crop was stored, the secondary certificates could be issued then, not to control the harvesting but to control the “other preparation for disposal”. (Section 20.)

Where the plan requires the certificate prior to harvesting, it would be unlawful to harvest without it; but where the plan, as here, requires the certificate after storage and prior to marketing, it is lawful to harvest and store, but not to market without the certificate. In the present case the evidence shows that storage is the ordinary step which follows harvesting in the case of practically all the lemons produced. They are delivered to the place of storage for curing, washing, grading, etc., as well as to await the most favorable market, and though the act makes special provision for proration of the small portion of the crop which does not go into storage, the bulk of the crop is handled in this manner. To apply the proration plan, i. e., to make the marketing allotments, when practically the entire product is in conveniently located warehouses, with each grower’s production measured and identified, is entirely reasonable and fully complies with the statutory provisions.

Moreover, the issue is completely set at rest by the 1935 amendment to section 18 and the enactment of a new section, 19.1, which provides: “Proration may be periodic or seasonal in character and may be based upon actual production, whether in storage or otherwise, or upon estimated production.” This amendment, enacted after the formation of the district, but prior to the institution of the proration plan attacked herein, is clearly applicable to the present proceeding. (See Dr. Miles Calif. Co. v. Sontag Chain Stores, 8 Cal. (2d) 178 [64 Pac. (2d) 726].) Indeed, plaintiffs concede the applicability of the legislation of 1935 to the present proceeding, and contend that other changes in that year, now to be discussed, are also applicable.

We have already pointed out that under our prior decision and by the application of reasonable rules of construction, the standard packed box of lemons was a proper “producing factor”. In 1935, section 2, subdivision (k), ivas amended to read: “The term ‘producing factor’ means the unit of one acre unless the commission finds a smaller unit is required ...” Plaintiffs contend that this amendment nullifies the entire proceeding taken by the petitioners because the standard packed box of lemons is no longer a proper producing factor. But plaintiffs have ignored a substantial difference between the two 1935 amendments mentioned, and their contention that if one applies, both must, is unfounded. The amendment authorizing proration based upon storage (see supra) has this effect: a proration zone or district was properly formed by compliance with the statutory requirements then in force; the committee then proceeded to institute a plan of proration for that zone; the plan would be valid if, at the time it was placed in operation, the law authorized it. Here, at the time the proration plan was to go into effect, based upon storage, its validity could rest upon the law as amended in 1935, then in force.

But the other 1935 amendment, changing the definition of “producing factor”, relates to the requirements essential to the formation of the district or zone itself. The original petition for formation must be signed by owners of two-thirds of the “producing factors”. In the present case it was so signed, as we have held; and the district was validly formed and prepared to function. As to its future operations, e. g., the institution of a proration program, and the allocation of marketing quotas, it would be governed by the law in force at the time it acted. But as to its past formation, no statutory change can be construed to operate retroactively so as to make this invalid. Where new districts are to be formed to control production in other commodities, the producing, factors chosen must come within the new legislation. But the present district, validly organized under existing law, was not affected by the changed requirements for the organization of new districts.

Plaintiffs also assert that the program approved would result in injustice to them. However, the trial court considered that the commission’s contrary findings on this point were not open to question, in so far as the validity of the program was concerned, and this holding was manifestly correct.

No other points require discussion. The judgment is reversed.

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