ÆäÀÌÁö À̹ÌÁö
PDF
ePub
[blocks in formation]

emption to religious institutions in general, without qualification."

We find it unnecessary to discuss the numerous decisions of other states, in which laws more or less similar to ours are construed to mean that domestic corporations are exempt and foreign corporations taxed. Nor is it at all necessary to discuss the conceded right of a state to discriminate be tween foreign and domestic corporations in the imposition of the inheritance tax. tate of Speed, 203 U. S. 553, 27 Sup. Ct. 171,

51 L. Ed. 314.

The judgment is affirmed.

Es

We concur: MELVIN, J.; VICTOR E. SHAW, Judge pro tem.

(178 Cal. 128)

HAMAKER et al. v. BRYAN et al. (L. A. 4164.) (Supreme Court of California. April 13, 1918. Rehearing Denied May 9, 1918.)

1. TRIAL 194(11)

[ocr errors]

BAD

- INSTRUCTIONS FAITH-PROVINCE OF JURY. In an action for damages for breach of contract to convey real estate in which damages for bad faith were claimed under Civ. Code, 3306, an instruction defining bad faith as any unlawful or unjustifiable refusal on the vendors' part to comply with the agreement would be sufficient to constitute bad faith, taking into consideration all the facts and circumstances surrounding the failure to convey, was erroneous; the bad faith of the vendors being a jury question.

2. VENDOR AND PURCHASER 351(1) BREACH OF CONTRACT-"BAD FAITH."

In an action for breach of contract to convey real estate, it was not bad faith, under Civ. Code, § 3306. providing measure of damages in case of "bad faith" of vendor, for the vendors to enter into the contract after having made arrangements to secure title to the land they agreed to convey.

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Bad Faith.]

3. VENDOR AND PURCHASER 351(1) BREACH OF CONTRACT-"BAD FAITH."

In an action for breach of contract to convey real estate, a few days' delay by the vendors in securing title to the land does not constitute bad faith, within Civ. Code, § 3306, relating to measure of damages in case of "bad faith" of vendor.

Department 2. Appeal from Superior Court, Los Angeles County; Frank G. Finlayson, Judge.

Hollzer & Morton, Harry A. Hollzer, and C. B. Morton, all of Los Angeles (Jerome H. Kahn, of Los Angeles, of counsel), for respondents.

WILBUR, J. This is an action brought by the plaintiffs to recover damages for breach of contract to convey real estate, executed March 14, 1911. The Code prescribes the ordinary measure of damages in such cases, and then makes this special provision, "but adding thereto, in case of bad faith, the difference between the price agreed to be paid and the value of the estate to be conveyed," etc. The price agreed to be paid in the instant case was $33,500, of which $250 was paid and $4,750 agreed to be paid in cash, the balance by mortgage and trust deed on the property. The verdict was for $5,250. The principal question involved was whefaer or not there was bad faith in the refusal, if any, to convey. On this subject, the court instructed the jury as follows:

"In order to charge the defendants with bad faith, it is not necessary that their__ conduct be shown to be fraudulent. It is sufficient to show that their conduct in failing to convey this property to the plaintiffs was by reason of any frivolous or unfounded refusal in law or in fact to comply with the terms of their agreement. Any unlawful or unjustifiable refusal on their part to comply with their agreement would be sufficient to constitute bad faith; and in determining whether or not the conduct of the defendants in this case was such as to show bad the facts and circumstances surrounding, their faith, you should take into consideration all of failure to convey the property as disclosed by the evidence."

[1-3] The jury were thus instructed that: "Any unlawful or unjustifiable refusal on their [the vendors'] part to comply with their agreement would be sufficient to constitute bad faith."

Every breach of a valid and subsisting contract for which damages may be recovered under section 3306, Civil Code, is "unjustifiable," and in a sense "unlawful," for the law requires that a person fulfill his legal obligations. The instruction was therefore clearly erroneous and prejudicial. The bad faith of the vendors was a question of fact to be determined by the jury. Appellate courts have been called upon to determine whether or not the evidence before the trial court was sufficient to justify a decision as to the fact of good faith or bad faith, but our attention has not been called to any case where a trial court, as a matter of law, has attempted to define "bad faith." In Morgan V. Stearns, 40 Cal. 434, 439, before the enactment of section 3306, Civil Code, the Supreme Court declined to disturb a judgment for damages based upon a difference between the market value and the contract price of land where the vendor "willfully refused to comPply with the terms of the agreement to con

Action by W. M. Hamaker and others against E. P. Bryan and others. Judgment for plaintiffs, and defendants appeal. Re-vey merely because the land has in the meantime considerably appreciated in value," but versed. said:

W. W. Butler and Anderson & Anderson, all of Los Angeles, for appellants. Morton,

"It is unnecessary to examine to what, if any, extent the rule of damages for failure to convey

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

land is affected by the good faith of the defend- [ with its further assertion of ownership of the ant appearing." sum deposited.

In Yates v. James, 89 Cal. 474, 26 Pac. 1073, the failure of the vendor to convey was due to the refusal of the vendor's wife to join in a deed, the property being covered by a homestead declaration filed by the vendor before the contract of sale, and yet it was held that "bad faith" was not "proved," and the judgment was reversed for that reason, although the inability of the defendant to convey was due to a defect in his title (if a homestead may be classed as such) existing at the time he made the contract of sale. In Clark v. Yocum, 116 Cal. 515, 48 Pac. 498, the vendee paid the full purchase price ($4,400) of certain land and appurtenant water right. The price of the water right was not segregated, but it was alleged to be of the value of $2,000. A judgment for that amount was secured and affirmed. The vendors were the owners of said water right, and accepted the full purchase price therefor, and then, "without any just reason or excuse," refused to perform their contract. It was held that they were guilty of bad faith as a matter of law. In the instant case it was not bad faith for the vendors, having made some arrangement to secure title, to enter into a contract of sale. Yates v. James, supra. Nor would a few days' delay in securing such title be sufficient evidence of bad faith. Judgment reversed.

Appeal from Superior Court, Los Angeles County; Charles Wellborn, Judge.

Action by E. K. Foster against the Los Angeles Trust & Savings Bank, a corporation. Judgment for defendant, and plaintiff appeals. Affirmed.

Isidore B. Dockweiler, of Los Angeles (W. D. Finch and Thomas A. J. Dockweiler, both of Los Angeles, of counsel), for appellant. Jones & Weller, of Los Angeles, for respondent.

JAMES, J. This action was brought to recover the sum of $840 and interest. The gist of the claim of the plaintiff was that this money had been deposited with the defendant by a third party for his benefit, and that, conditions precedent having been satisfied and demand made, plaintiff was entitled to collect from the defendant the sum mentioned. Answer was filed to the complaint, and among the defenses alleged was that of the bar of the statute of limitations. The case came on for trial, and before any witnesses were examined, defendant asked and was allowed to withdraw its plea of the statute of limitations. Thereupon plaintiff being called as a witness in his own behalf, defendant objected to the introduction of any evidence on the ground that plaintiff's complaint failed to state sufficient facts to con

We concur: VICTOR E. SHAW, Judge stitute a cause of action. This objection was pro tem.; MELVIN, J.

(36 Cal. App. 460)

sustained, and the judgment of dismissal,
from which this appeal is taken, followed.
It will be necessary to a proper under-

FOSTER V. LOS ANGELES TRUST & SAV. standing of the legal question presented to

INGS BANK. (Civ. 2113.)

(District Court of Appeal, Second District, California. March 4, 1918.)

1. ESCROWS 1-WHAT MAY BE PLACED IN "ESCROW."

The term "escrow." ordinarily considered, applies to a deposit of deeds, etc., and not to

money.

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Escrow.] 2. DEPOSITARIES 3-RIGHTS AND OBLIGA

TIONS.

state more particularly the facts relied upon by plaintiff to sustain his suit, as the same are expressed in the complaint. In March, 1907, the plaintiff and A. W. McCready entered into a contract executory in form as to both parties, by which McCready purchased from the plaintiff ten motorcars, to be thereafter shipped from St. Louis, Mo. The cars were to cost McCready in Los Angeles $2,800 each. One car was to be shipped immediately on the making of the agreement and the remainder, in lots of three, were to be shipped in March, April, and June, respectively, of the same year. McCready deposited with the defendant on account of the purchase and for plaintiff's benefit the sum of $2,800, which the defendant was instructed to pay over to the plaintiff in installments of $280 for each car as the same was delivered. In May of the same year three of the cars conIn such case, the seller waives its rights tracted for were delivered to McCready and against the depositary, where on refusal of buy were paid for in full by McCready. There er to accept delivery it sells the property at public auction and sues the buyer alone and upon McCready and the plaintiff mutually gets judgment for the full amount of the differ- released one another as to the sale and purence between the amount realized from the sale chase of four of the cars referred to in the and the amount of the contract price, making no account whatever of the sum on deposit; contract, and agreed further that McCready such action by the seller being inconsistent might draw down the sum of $1,960 of the

Where, under agreement between buyer and seller, money is deposited in a bank with instructions to deliver it to a seller on delivery of property, the bank is an agent for both parties, and must hold the same and pay it to the seller if there is a delivery, and the buyer if

there is not.

3. ELECTION OF REMEDIES 3(4) — INCONSISTENCY OF REMEDIES REMEDIES AGAINST DIFFERENT PERSONS.

$2,800 deposit. The defendant was advised of this change in the agreement of the parties by letter in the following form:

"May 24, 1907.

"Los Angeles Trust Co. Gentlemen: We agree to the releasing of $1.960 of the $2,800 deposit on the escrow on Moon motorcar, bal'Time ance to be applied on the last three cars. of shipment of same to be extended to Aug. 15, 1907. E. K. Foster. "A. W. McCready."

How

therefor. Respondent asserts that the conditions of the deposit were not like those attending an escrow wherein a release of the fund must be assented to by both the depositor and the other party in interest. Ordinarily considered, the term "escrow" applies to a deposit of deeds, etc. ever, there is no occasion for dispute as to terms in characterizing the situation which arose between the plaintiff and defendant. It is quite clear that the contract as made between Foster and McCready, and of which the bank had full instruction, required the depositary to pay over to Foster the remainder of the deposit when the last three cars were delivered. The depositary was the Mc-agent of both parties for the purpose of applying the money in the way contracted for. On the other hand, had Foster failed to deliver the cars or to offer to deliver them, it is equally clear that the money would then belong to McCready, and he would be entitled to recover it from the bank. We think, however, that the facts as stated in the complaint of plaintiff show that the plaintiff waived his right to recover this money from the bank. If upon the tender of the motorcars it may be said that the defendant held in its hands as agent for the plaintiff the $840, then it must also be said that there was then paid upon the purchase price of the motorcars the sum of $840, for the possession of the money by the agent of the plaintiff would be the possession of the plaintiff. However, plaintiff was not content to assert his right to the deposit and refused to so Plaintiff apply the deposit at that time. acted in a way which was inconsistent with the idea that he further asserted ownership of the remainder of the fund. After selling the motorcars at public auction, he proceeded to bring an action against McCready for the full amount of the difference between what plaintiff actually secured at the auction sale of the cars and the amount of the contract price, making no account whatever of the $840 which he now alleges he is entitled to recover. In our opinion, after such action was taken by the plaintiff, the bank was justified, upon the demand of McCready, in refusing to turn over the money to the plaintiff.

Thereafter, and in August, the three motorcars agreed to be last delivered, arrived, and on August 31st the plaintiff notified McCready and the defendant that the cars had arrived and were ready for delivery in accordance with the contract, and an offer was then made to deliver the same. Cready refused to accept the cars, and this defendant refused to pay over the balance of the deposit, which amounted to $840, being the same sum herein sued for. The refusal of defendant to pay over the money was based upon instructions given to it by McCready. Thereafter the plaintiff gave due notice that he would sell the three cars at public auction, and such a sale was held. The three cars were sold at this sale for an aggregate of $6,020. The expenses of sale amounted to the sum of about $400. Thereafter an action was commenced by this plaintiff in the superior court, in which action McCready and this defendant were made defendants and in which action plaintiff sought to recover from McCready the difference between the amount received by him for the motorcars at the auction sale, plus expenses of sale, and the price which McCready had agreed to pay for the cars. It is not stated whether in this action summons was served upon this defendant, but it is set forth in the complaint here that defendant McCready demurred to the complaint in the action last mentioned, which demurrer was sustained. Thereupon this plaintiff, being the plaintiff there, filed an amended complaint, in which this defendant was not named as party defendant. That action proceeded to trial, and judgment was recovered against McCready for the amount prayed for. The judgment was rendered in November, 1908. This action was commenced in March, 1915.

[1-3] It is appellant's contention that the money deposited by McCready with the defendant bank became due to plaintiff upon the performance of the conditions precedent, to wit, the offer to deliver the motorcars contracted for, and that upon the refusal of the bank to pay the same to him, there arose a cause of action in favor of the plaintiff, entitling him to recover the principal amount in suit. Respondent asserts in its brief that it was acting as a mere depositary, and under the provisions of section 1822 et seq., Civil Code, was obligated to return to McCready the money upon his making demand

The judgment appealed from is affirmed.
CONREY, P. J.; WORKS,

We concur:
Judge pro tem.

(36 Cal. App. 454) A. P. HOTALING & CO. v. HAMILTON. (Civ. 1792.) (District Court of Appeal, Third District, California. March 4, 1918. Rehearing Denied by Supreme Court May 3, 1918.)

1. ASSIGNMENTS FOR BENEFIT OF CREDITORS 295(8)-SPECIFIC FINDINGS-NECESSITY. Where plaintiff and defendant, creditors, entered into an agreement with debtor unable

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

to pay his debts, whereby debtor assigned all
his interest in his business to defendant, in
trust for the benefit of all creditors, and plain-
tiff sued for breach of such agreement, de-
fendant, to be protected against personal ac-
tions against him by creditors other than plain-
tiff for damages for violation of the agreement,
was, notwithstanding the action purported to
be one at law for damages, entitled not only to
an accounting, but to clear and specific find-
ings and a judgment based thereon adjudicat-
ing the respective rights of all the creditors.
2. TRIAL 318-VERDICT TO Support JudG-

MENT.

The general verdict not being determinative of the issues made by the pleadings and developed by the evidence, the judgment is without sufficient support.

Appeal from Superior Court, Siskiyou County; James F. Lodge, Judge.

Action by A. P. Hotaling & Co. against L. Hamilton. Judgment for plaintiff, and defendant appeals. Reversed.

Mason I. Bailey, and Taylor & Tebbe, of Yreka, for appellant. Samuel T. Bush, of Los Angeles, and B. K. Collier, of Yreka, for respondent.

the breach of a certain written agreement

entered into and executed by the parties

hereto.

time in the month of December, 1914, when he, without the consent or the permission of the plaintiff or any of the other aforesaid creditors, transferred and conveyed all right, title, and interest in and to said business, including the town license to conduct the same, to one Toleman, "who ever since has been and is now in possession thereof, and who ever since and now claims to be the owner thereof." It is further alleged that the said saloon business and all the property appertaining thereto, including the said saloon license, were at all times mentioned in the complaint and are actually and reasonably worth the sum of $2,750; that the defendant failed to exercise due and

reasonable diligence in the performance of the terms of the said agreement, "and that

if defendant had done so he could have sold while it was in his possession as trustee as said saloon and saloon property and license aforesaid for the sum of $2,750;" that defend- · ant "willfully, wrongfully, carelessly and negligently failed and refused to operate, con

property

trans

HART, J. The action is for damages for duct, conserve or dispose of said saloon in a businesslike, diligent or proper manner, and in ferred and surrendered said saloon and all violation of said agreement * and delivered possession The complaint alleges that prior to the 18th day of July, 1914, one R. F. Crist owned, thereof to the said Toleman for some unknown consideration," thus allowing and peroperated, and conducted a saloon and retail liquor business in the town of Dunsmuir, mitting said business and all property connected therewith and the proceeds thereof Siskiyou county; that said Crist was indebted to the plaintiff and to numerous other to become wholly lost, to the damage of said creditors for goods, wares, and merchandise plaintiff and all other creditors of the said sold and delivered to him by said creditors; Crist in the sum of $2,750. The complaint that said Crist was then and there unable to proceeds to say that, within the state of California there are numerous creditors pay said indebtedness, and that "all of said of said Crist, the exact number of whom or indebtedness is still unpaid; that at the sug- the amount of their respective claims the gestion and by and with the consent of this defendant and this plaintiff, the said Crist, ment of this action unable to ascertain, but plaintiff was at the time of the commenceon or about said 18th day of July, 1914, trans- that the plaintiff is informed and believes ferred, assigned, and conveyed to the defendant all his rights, title, and interest in and and therefore alleges that said claims exceed to the said business and all the property of each and all of said creditors have a common in the aggregate the sum of $2,750, and that any kind connected with and appertaining thereto, including the saloon license granted and general interest with the plaintiff in the by the town of Dunsmuir," in trust for the outcome of this action, and that the action benefit of all of said creditors, with the un-is commenced, maintained, and prosecuted on derstanding and agreement then and there expressly made and had between said Crist and this plaintiff and defendant that the said transfer, assignment, and conveyance was made and executed upon condition that the said defendant should occupy and conduct said business and conserve the assets thereof for the joint benefit of all of said creditors, and distribute the net proceeds and profits realized therefrom pro rata to all said creditors; that on said 18th day of July, 1914, the defendant entered into and took possession of all of said property under said The prayer of the complaint is for "judg agreement and upon the terms and conditions ment against said defendant in the sum of therein specified, and remained and continued $2,750 damages" with legal interest and in possession thereof thereunder until some' costs. A demurrer on general and special

behalf and for the benefit of all of said creditors in common with the plaintiff, as provided by section 382 of the Code of Civil Procedure; "that it is impracticable to bring all of the said interested parties before this court, and that this plaintiff does hereby consent to the intervention in this action of said creditors at any time that the court may grant them leave to intervene and does hereby agree to prorate to and with all of said creditors in a lawful manner the proceeds of any judgment obtained herein."

grounds was interposed to the complaint, and the same being overruled, the defendant met the issues tendered by the plaintiff by specifically denying the vital averments of the complaint. The cause was tried before a jury and a verdict returned in favor of the plaintiff in the sum of $950. Judgment was entered accordingly. This appeal is by the defendant from said judgment.

that the business, while under his management, did not pay or return any profits, and that, as a matter of fact, during said time he paid out more than he took in by the sum of $141.30. This testimony was not contradicted, except in the testimony of Attorney Bailey, of Dunsmuir, to whom it was agreed that all profits received by the defendant from the business should be turned over and by him distributed pro rata to the creditors, who testified that in one of the months during which the saloon was managed by Hamilton under the trust agreement the latter turned in to him $102 as profits from the business.

The action proceeds upon the theory that defendant was the trustee for the creditors of Crist; that the sale to Toleman was without the consent or permission or knowledge of the plaintiff or other creditors, and that the sum received by defendant from Toleman was greatly below the value of the property. The transaction culminating in the agree The plaintiff contends that as to the remedy ment, while not strictly a technical assignit had the right to elect between an action for ment by Crist for the benefit of his creditors, an accounting in equity of the trust property amounted in practical effect to the same and the proceeds derived therefrom and thing. But whether it was or not, the agreetherefor and an action in tort for a wrong-ment nevertheless purports to be for the beneful breach of the trust agreement, and select-fit of all the creditors of Crist, and the comed the latter remedy.

Appellant contends: (1) That the case is essentially one in equity, that the verdict of the jury was advisory only, and that the court should have found the facts; (2) that the evidence was insufficient to justify the verdict, the amount found by the jury as the value of the property being excessive.

plaint, as we have shown, proceeds upon that theory. That there were other creditors than the plaintiff, the defendant, and Diggles, is made manifest by the fact that, whereas the combined claims of these persons against Crist is or was approximately $2,032.50 only, the aggregate indebtedness of Crist was approximately $4,000. Both the complaint and the evidence show this to be so. There is no showing either in the com

er than the plaintiff and the defendant knew anything about or consented to or bound themselves by the agreement which is the basis of this action, or by any judgment that might be obtained herein.

The evidence discloses that for several years prior to the 14th day of July, 1914, said Crist owned and operated the saloon proper-plaint or by the proofs that the creditors othty and business in question; that, on that date, being unable to meet an indebtedness of approximately $4,000 which he had incurred in the operation of said business, he sold the same, together with the stock of liquors and cigars then on hand and the fixtures, to the defendant, giving the latter a bill of sale as evidence of the transfer; that on the 18th day of July, 1914, one Rafferty, a representative of the plaintiff, having previously learned of said transfer, went to Dunsmuir and called upon the defendant and said to him that the plaintiff, to which Crist was indebted in a large sum of money, would not stand for the transfer of the saloon by Crist to him, and, after considerable conversation about the matter, the two men (Rafferty and the defendant) agreed to the proposition embraced within the written agreement upon which this action is founded. The evidence further shows that Crist was, at the time said agreement was made and executed, indebted to the defendant in the sum of about $800 and to the plaintiff in the sum of $1,200.

Crist testified that he was indebted to his several creditors in a sum amounting near to $4,000. A Mr. Diggles, a wholesale liquor dealer, testified that Crist was indebted to him for liquors in the sum of $32.50. There was no testimony showing who the other creditors, if any, were, or how much he owed to persons other than the plaintiff, the defendant, and Diggles. The defendant testified

[1, 2] The defendant, to be protected against personal actions against him by creditors other than the plaintiff for damages for a violation of the trust agreement, was, notwithstanding that the action purports to be one in law for damages, entitled not only to an accounting of the trust property and funds, but also entitled to clear and specific findings of the facts by the court or by the Jury under the order or direction of the court, and a judgment based upon those findings involving an adjudication of the respective rights of all the creditors of Crist. The general verdict and the judgment thereupon entered are uncertain as to many important facts essentially arising under the issues as made by the pleadings. It cannot be determined either from the verdict or the judg ment who the creditors of Crist are, or who are entitled to partake of the fruits of the judgment, and to what extent. Then the further question arises: What is the effect or full scope of the judgment? Does it end or extinguish the trust so as to protect the defendant against the effect of actions by other creditors than the plaintiff for damages for breach of the trust agreement? These and a number of other matters which could be suggested are of vital importance

« ÀÌÀü°è¼Ó »