76 Cal. App. 2d 75 | Cal. Ct. App. | 1946
Appellant is the owner of several life insurance policies sold to him by respondent. In his complaint he alleged that one Adolph Frankel, who he asserted was an agent of respondent, had forged appellant’s name on applications for loans on some of the policies and on checks issued by respondent payable to appellant for the amounts of the several loans made on the forged applications, and had applied the proceeds to his own use. Appellant sought to recover, (1) by his first cause of action, the amount of the alleged forged policy loans, together with interest which he had paid thereon prior to the time of his alleged discovery of the fraud; and (2) by a second cause of action, a declaratory judgment that the amount admittedly borrowed by him on his policies be declared to be the amount of his true obligation to respondent, and that the latter be ordered to cancel all other claimed indebtedness. Respondent answered denying the material allegations of the complaint and particularly denying that Frankel was its agent except to canvass for applications for insurance and to collect the first premiums thereon, and for no other purpose, and pleading the statute of limitations.
The first cause of action was tried by a jury which rendered a verdict in favor of respondent, and judgment was purportedly entered in accordance with the verdict. The second cause of action was tried by the court without a jury upon the evidence that had been presented to the jury, upon which findings and a separate judgment were rendered in favor of respondent. Appellant has appealed from the judgment of the court and has attempted to appeal from the purported judgment entered on the verdict of the jury.
Appellant and Frankel had known each other since 1906. The complaint alleges that since 1917 they had been close friends and a relation of trust and confidence existed between them, by reason of which appellant entrusted Frankel, at the latter’s solicitation and request, with the care and physical custody of appellant’s life insurance policies hereinafter mentioned.
In 1912, in Portland, Oregon, appellant purchased two life insurance policies from respondent. Upon arriving in Los An
The alleged forgeries extended over a period of nearly three years—from August 15,1933, to June 5,1936. Adolph Frankel committed suicide in September, 1940. Notwithstanding the fact that an intimate and confidential friendship had existed between the two men since 1917, and that appellant had entrusted Frankel with possession of his life insurance policies for many years, appellant asserts that he had no knowledge of Frankel’s death until March, 1942.
1. Franhel’s authority as respondent’s agent. Appellant’s case is predicated on the theory that Frankel was an agent of respondent with unlimited authority to bind the latter, and that all of his acts complained of by appellant were done as respondent’s agent and duly authorized representative. The complaint alleges that Frankel, in his capacity as agent of respondent, retained physical custody, possession and control of appellant’s life insurance policies; that appellant applied to Frankel in his capacity as such agent to secure loans on his policies; that in such capacity Frankel retained the applications for loans in his custody; that Frankel committed suicide because of defalcations made by him during the period he was acting in the capacity of agent for and on behalf of respondent.
Appellant having sought to charge respondent with the acts of Frankel as the alleged agent of respondent, the burden rested on him to prove the existence of such agency and that Frankel was authorized by respondent to do on its behalf the acts of which appellant complains. (Ewing v. Hayward, 50 Cal.App. 708, 715 [195 P. 970] ; Nofsinger v. Goldman, 122 Cal. 609, 616 [55 P. 425].) Appellant failed to prove any of the allegations in the complaint necessary to bind respondent for Frankel’s acts. The uncontradicted evidence is to the contrary.
Frankel’s authority and duties as respondent’s agent were expressly defined and limited by an agreement in writing and he was without power to represent or to bind respondent in any manner other than as thereby authorized. The agreement provides that “The agent shall canvass for applications for insurance in the Society and shall collect the first premiums thereon. . . . The agent is not authorized to make, alter or dis
Appellant delivered his policies to Frankel and his brother upon their proposal that a disability and double indemnity clause, which could be had for a small additional expense, be added to them. After Frankel obtained possession of the policies he suggested that they be left with him because appellant was traveling much of the time, and that he, Frankel, could take care of them in case appellant should suffer an accident. In so doing he was the agent and representative of appellant and not of respondent.
The fact that Frankel, as an agent for the limited purpose of canvassing for applications for insurance, worked out of the office of an agency manager of the company did not add to his powers as an agent. The receipt which he gave to appellant when the latter’s policies were delivered to him had been lost and appellant testified that the receipt was on a blank form bearing the name of respondent. (The right of the jury and the court to disbelieve appellant’s testimony is discussed hereinafter.) If the statement be true, nevertheless Frankel’s authority as agent, restricted as it was by the agency agreement, did not invest him with power to sign a receipt for the policies on behalf of the company, and if he procured a blank form and used it in an unauthorized manner respondent was not bound by it. As agent of respondent Frankel was without right to retain custody of the policies, to apply for or to accept applications for loans thereon for appellant, to retain such applications in his possession, or to receive checks issued by respondent in favor of appellant. Such acts as Frankel performed in those matters were done at the request of appellant and as the latter’s agent, for the result of which respondent is not answerable.
2. The statute of limitations. In order to avoid the effect of the statute of limitations (Code Civ. Proc., § 338, subd. 4), and in anticipation of that defense, appellant alleged in his complaint that Frankel at all times concealed from him any knowledge or information concerning the alleged forged applications for loans or the alleged forgeries of his name on the checks, and that he had no knowledge or information of the same until March 1,1942; he then immediately visited the office of respondent in Los Angeles and began his investigation, which resulted in the discovery that his name had been forged
By demurrer and by answer respondent pleaded that both causes of action set forth in the complaint were barred by subdivision 4 of section 338 of the Code of Civil Procedure. The complaint was filed in January, 1944, but it was stipulated that for the purpose of the action it was deemed to have been commenced as of March 1,1942. This is the approximate date on which appellant claims to have received his first knowledge of Frankel’s defalcations, when, in conversation with an agent of respondent in Redlands, he learned that Frankel had committed suicide in September, 1940, and was advised to look after his insurance because Frankel “had done all kinds of crooked work. ’ ’
In 1917 appellant became a stockholder in the California Sanitary Canning Company whose plant was located in Los Angeles. Continuously since that date he has been actively engaged in the business of the company. His duties have required him to travel constantly in the territory comprising all of California south of Fresno and Santa Maria for the purpose of seeing that vegetables were planted, grown, harvested, and delivered to the cannery for processing. Beginning in 1928 appellant procured loans from respondent from time to time upon his insurance policies. He testified that because of his long absences from Los Angeles-ffie gave instructions to the bookkeeper at the cannery to see that all amounts due on his insurance policies, both annual premiums and interest on policy loans, “interest payments, everything,” were paid when notices were received from respondent; the payments were to be made “if I am in town or not.” Appellant left his insurance matters entirely with the bookkeeper and never, as a prudent man would have done, made any computations of the amounts of interest which the latter had paid.
Though he had the means of knowing whether he was paying interest on an amount greater than his admitted borrowings he made no effort to ascertain the correct amount. Beginning in November, 1928, and continuing until 1942, statements were sent from respondent’s office addressed to appellant at the office of the cannery at least once each year, in some years more often, showing the amount of principal and
The bookkeeper was acting under the express direction of appellant, within the scope of his agency and within the
Respondent offered in evidence three applications for loans, one dated January 3, 1934, and two dated January 4, 1934. Appellant would not admit on the witness stand that the signatures on the applications were his but as to each one he said that “it looks like my signature.” However, these same . applications, among other documents, were presented by his counsel to a handwriting expert as exemplars of the genuine signatures of appellant for the purpose of comparison with the alleged forged endorsements of appellant’s name on the checks above mentioned. The signatures on the applications for the loans must therefore be deemed to be his genuine signatures. Appellant testified that he never received the amount of the loan procured upon these applications and that he never made any complaint or inquiry concerning it: The amount of the check issued by respondent for the loan corresponds with an amount deposited in the account of Ad. Frankel & Co. six
An action for relief on the ground of fraud or mistake is barred unless commenced within three years after the discovery of the facts constituting the fraud or mistake. (Code Civ. Proc., § 338, subd. 4) In order to escape the effect of this provision one who seeks to maintain such an action as this must allege and prove (1) when the fraud was discovered; (2) the circumstances under which it was discovered; (3) facts to show that he is not at fault for having failed to discover the fraud sooner. He “must show that the acts of fraud were committed under such circumstances that he would not be presumed to have any knowledge of them ... as the means of knowledge are equivalent to knowledge, if it appears that the plaintiff had notice or information of circumstances which would put him on inquiry which, if followed, would lead to knowledge, or that the facts were presumptively within his knowledge, he will be deemed to have had actual knowledge of these facts.” (Lady Washington Cons. Co. v. Wood, 113 Cal. 482, 487 [45 P. 809] ; Consolidated R. & P. Co. v. Scarborough, 216 Cal. 698, 702 [16 P.2d 268] ; Henigan v. Yolo Fliers Club, 208 Cal. 697, 704 [284 P. 906].) Whether appellant had notice of circumstances sufficient to put him on inquiry was a question of fact to be determined by the jury or the trial judge. (Northwestern P. C. Co. v. Atlantic P. C. Co., 174 Cal. 308, 312 [163 P. 47] ; West v. Great Western Power Co., 36 Cal.App.2d 403, 411 [97 P.2d 1014] ; Young v. New Pedrara Onyx Co., 48 Cal.App. 1, 20 [192 P. 55].)
The facts above related, especially the annual receipt of interest statements by appellant and his payment thereof, and his failure to complain or to investigate when he did not receive the amount of the loan applied for in 1934, were sufficient to lead him to knowledge of the forgeries of the checks. He will be presumed to have known whatever with reasonable diligence he might have ascertained. (Wood v. Carpenter, 101 U.S. 135, 140 [25 L.Ed. 807, 808].) Business prudence would have compelled him to make inquiry and his failure to make it was inexcusable negligence. (Simpson v. Dalziel, 135 Cal. 599, 603 [67 P. 1080].) Means of knowledge are equivalent to knowledge. (Shain v. Sresovich, 104 Cal. 402, 405 [38 P. 51] ; People v. San Joaquin etc. Assn., 151 Cal. 797, 807 [91
Appellant argues that subdivision 4 of section 338 of the Code of Civil Procedure has no application to the case, and that “both defendant and the trial court have completely misconstrued and misconceived the nature of the present action and plaintiff’s position.” Nevertheless he pleaded facts in his complaint in essaying to avoid the effect of that provision by alleging failure to discover the fraud within three years of its commission, and at the trial he considered the statute to be of such import that he himself requested and the court properly gave an instruction that said section “provides that a cause of action for relief on the ground of fraud or mistake is not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake.” He concedes in his brief that “this was a concealed fraud on the part of Frankel,” but his protestations that “normally [it] would not have been discovered by the plaintiff” and that “he had a right to rely on the accuracy of the defendant’s notices” are without merit for reasons above pointed out.
Appellant contends that the statute of limitations is not applicable because (a) respondent is a mutual company and holds in trust for its policyholders the funds representing the guaranteed cash surrender values, loan values, and dividends applicable to its issued policies, and (b) the statute of limitations does not run against a trust until actual knowledge has been brought home to the beneficiary and there has been either a demand by the beneficiary or a repudiation by the trustee. It is not necessary to enter into a discussion of the character of the funds and dividends referred to, since they are not the subject of this action and since appellant’s contention must be rejected for other reasons: (1) The relation between insurer and insured is contractual (Richards v. Metropolitan Life Ins. Co., 184 Wash. 595 [55 P.2d 1067] ; Trinity Universal Ins. Co. v. Willrich, 13 Wn.2d 263 [124 P.2d 950, 954]) and the contracts of insurance did not create a trust as
3. The interest statements became accounts stated. The purpose of submitting the periodical statements of principal and interest unpaid on the policy loans was to apprise appellant of the amounts claimed to be due and unpaid from him. It was his duty to examine the statements and to report to respondent at once any error found, and his failure so to do constituted his assent thereto and each statement became an account stated. (Union Tool Co. v. Farmers etc. Bank, 192 Cal. 40, 53 [218 P. 424, 28 A.L.R. 1417] ; Adler v. Granelli, 112 Cal.App. 688, 690 [297 P. 592] ; San Jose Brick Co. v. Rhodes-Jamieson Co., 112 Cal.App. 558, 560 [297 P. 619].) An account stated is a writing that exhibits the state of the account between parties and the indebtedness claimed to be due from one to another, and if assented to by the debtor, either expressly or impliedly, it becomes a new contract. (Lacy Mfg. Co. v. Gold Crown Mining Co., Ltd., 52 Cal.App.2d 568, 577 [126 P.2d 644] ; Wright v. Strobeck, 139 Cal.App. 552, 561 [34 P.2d 781] ; Hendy v. March, 75 Cal. 566, 568 [17 P. 702] ; Mayberry
Having by his own act permitted the creation of a new contract annually between himself and respondent, and having annually paid without protest the amounts shown on each account to have been due, appellant cannot now dispute the correctness of the sum presently owing by him as shown by the several accounts stated.
Appellant maintains that the defense of an account stated, not having been pleaded in the answer, has been waived. Section 4% of article VI of the Constitution provides that no judgment shall be set aside or new trial granted for any error as to any matter of pleading or procedure unless, after an examination of the entire cause, including the evidence, the court shall be of.the opinion that the error complained of has resulted in a miscarriage of justice. We have examined the evidence and have concluded that the findings and judgment are in accord with it and that the failure of respondent to plead an account stated has not resulted in a miscarriage of justice.
Appellant’s complaint that in order to prevent his policies from being cancelled he will be compelled to pay interest in the future on the fraudulent loans is answered by the fact that he paid interest thereon without objection until the notices ripened into accounts stated and until his right to object had been barred by the statute of limitations.
4. The evidence of forgery. The presumption is against fraud (Hedden v. Waldeck, 9 Cal.2d 631, 636 [72 P.2d 114] ; Ryder v. Bamberger, 172 Cal. 791, 800 [158 P. 753] ; Abrams v. Daugherty, 60 Cal.App. 297, 304 [212 P. 942] ; Everett v. Standard Acc. Ins. Co., 45 Cal.App. 332, 338 [187 P. 996]) and is not overcome by shadowy evidence. (Truett v. Onderdonk, 120 Cal. 581, 588 [53 P. 26] ; Rice v. California-Western etc. Co., 21 Cal.App.2d 660, 668 [70 P.2d 516] ; Raine v. Spreckels, 54 Cal.App.2d 169, 173 [128 P.2d 709] ; Trousdell v. Equitable Life Assurance Soc., 55 Cal.App.2d 74, 76 [130 P.2d 173].) The burden rested on appellant to
A handwriting expert testified that the checks payable to appellant and deposited in the account of Ad. Frankel & Co. had been endorsed in handwriting other than that of appellant. While there was no evidence that the endorsements were made by Frankel, the disputed checks, 11 in number, extending over the period from August 16, 1933, to June 11, 1936, were deposited in the Ad. Frankel & Co. bank account, and it will be presumed that the endorsements were made by Frankel or by some person in his behalf. No liability rests on respondent if this be true. There is no evidence that appellant did not know of or that he did not consent to the endorsements.
5. Instructions 'to the jury. Appellant assigns as error the giving of the following instruction: “You are instructed that where a party to an action fails to produce a witness who is under his control, or who fails to produce documents under his control, when it would be natural for him to produce the documents or the witness if the facts known by him had been favorable, his failure to bring the documents or the witness before the court may create an inference that the
The failure of appellant to produce the "J. Shapiro” file, his refusal to call the bookkeeper, and the evidence given by the latter, adverse to appellant’s cause, when called by respondent, support the inference that the evidence of the two absent employees and the contents of the file would also have been unfavorable to appellant and provide a foundation for the instruction. (Code Civ. Proe., § 1963, subd. 5 and § 2061, subds. 6 and 7.)
The principle of the instruction is approved in 2 Wigmore on Evidence, (3d ed.) § 285, p. 162, where the author says: "The failure to bring before the tribunal some circumstance, document, or witness, when either the party himself or his
We find no error in giving the instruction, but even though it had been improper the objection to it was waived by appellant’s request for an instruction which the court gave with the same purport but in different language as follows: "If and when you should find that it was within the power of a party to produce stronger and more satisfactory evidence than that which was offered on a material point, you should view with distrust any weaker and less satisfactory evidence actually offered by him on that point.” Appellant cannot complain of an instruction given at the request of respondent when he requested a like instruction. (Langazo v. San Joaquin L. & P. Co., 32 Cal.App.2d 678, 696 [90 P.2d 825].) One may not complain of error which he himself has invited. (Van Der Veer v. Winegard, 41 Cal.App.2d 518, 521 [107 P.2d 97] ; Gjurich v. Fieg, 164 Cal. 429, 433 [129 P. 464, Ann. Cas. 1916B 111].) Appellant having adopted a theory at the trial the judgment will not be reversed because the trial court instructed the jury according to that theory. (Sommer v. Martin, 55 Cal.App. 603, 610 [204 P. 33]. See Diel v. Baxter, 58 Cal.App.2d 383, 387 [136 P.2d 789] ; Marra v. Aetna, Const. Co., 15 Cal.2d 375, 379 [101 P.2d 490] ; United States Farm Land, Co. v. Darter, 42 Cal.App. 292, 303 [183 P. 696].)
The court properly instructed the jury (a) that the burden rested on appellant to prove that his failure to find out about the claimed fraud was not occasioned by the lack of diligence of himself or his authorized agent; (b) that the burden was on him to show by a preponderance of evidence
We find no error in the instructions given to the jury relating to the duty of appellant to make inquiry concerning facts which came to his attention, or to the attention of his agent, or in respect to the facts which would have caused a prudent man to make inquiry, or in the instruction defining “discovery,” all of which are correct statements of the law. If the circumstances are sufficient to put a prudent man on inquiry he is charged with notice and knowledge of the existing facts. (Prouty v. Devin, 118 Cal. 258, 262 [50 P. 380].)
A reviewing court will not consider one instruction separate and apart from all others. Instructions must be con
If any errors may be found in the instructions they become immaterial by reason of the fact that the findings of the court are adverse to appellant on all issues presented by the pleadings, including those in the first cause of action that were submitted to the jury. Since the views of the court as expressed in its findings and judgment are that appellant is not entitled to recover the amount sued for in the first cause of action and that his action is barred by the statute of limitations, it is reasonably certain that if the judgment on the verdict had been the final judgment in the case the court would not have set it aside on a motion for a new trial. Therefore no error in the instructions could have resulted in a miscarriage of justice. (Haney v. Takakura, 2 Cal.App.2d 1, 9 [37 P.2d 170, 38 P.2d 160] ; Wallace v. King, 27 Cal.App.2d 174, 181 [80 P.2d 523] ; Etienne v. Kendall, 202 Cal. 251, 257 [259 P. 752].)
6. The findings of fact are sustained ly the evidence. In reference to appellant’s claim that some of the findings are not sustained by the evidence certain principles of law are applicable: Where a conflict in the evidence exists the findings of the trial court are conclusive and every substantial conflict must be resolved in favor of the finding. (Buckhantz v. R. G. Hamilton & Co., 71 Cal.App.2d 777 [163 P.2d 756], and cases cited; Berger v. Steiner, 72 Cal.App.2d 208 [164 P.2d 559].) An appellate court will view the evidence in the light most favorable to the respondent, will indulge all intendments which favor sustaining the findings of fact, and will not disturb a finding if there is substantial evidence in the record to support it. (Estate of Isenberg, 63 Cal.App.2d 214, 216 [146 P.2d 424].) As to the first cause of action the jury, and as to the second cause the court, was the sole judge of the credibility of the witnesses,
In weighing appellant’s testimony the court and the jury had a right to and no doubt did take into consideration the manner in which he testified and the fact that on direct examination his memory was clear and his answers positive, while on cross-examination concerning the same matters as many as 30 times his answer was “I don’t remember,” or the equivalent. The jury and the court also had a right to consider his failure to call available witnesses who were under his control as employees at his cannery, and his omission to produce the ‘‘J. Shapiro” file which may have contained evidence pertinent to the issues in the action. Appellant testified that he never signed an application for a loan of a blank amount, but two of the applications signed in 1934 which his counsel admitted were signed by him were for blank amounts. The jury and the trial judge were in accord as to their findings and as to the weight given to the evidence produced by the respective parties.
Pursuant to the rules of law above stated and by reason of the weight, or the lack of it, that may have been given to appellant’s testimony, and by reason of all the evidence and the circumstances herein related, the court was justified in rejecting appellant’s evidence and in finding: (a) That it was not true that his name was forged by Frankel on the endorsements of the checks without his knowledge or consent; (b) that it was not true that Frankel concealed the facts relating to the loans and the alleged forgeries from him; (e) that he knew the amounts of his personal borrowings against each of his policies. Since Frankel was not respondent’s agent, except for the limited purposes set forth in the agency agreement, findings (a) and (b) were immaterial insofar as the cause of action against respondent is concerned. There is clear and positive evidence, hereinbefore stated at length, sustaining the several findings that appellant received each of the loan interest notices in due course of mail; that
7. The purported judgment on the verdict was void and the only judgment was that rendered by the court. Immediately after the rendition of the verdict of the jury on the first cause of action on October 10, 1944, the clerk, assuming it to be his duty so to do (Code Civ. Proc., § 664), entered a judgment in conformity with the .verdict, The second cause of action having been submitted to the court without additional evidence, findings of fact and conclusions of law thereon were filed on January 15, 1945, and judgment by the court was filed on the same day and entered on January 16, 1945. Appellant assigns as error the entry of two judgments, asserting that there can be but one judgment in an action no matter how many counts the complaint contains. The judgment rendered by the court recites the rendition of the verdict of the jury and the entry of judgment thereon, incorporates the same in the judgment of the court “as if specifically set forth herein,” and decrees that “plaintiff take nothing by his complaint in this action,” obviously covering both causes of action.
The general rule is that there can be but one judgment in an action (see Nicholson v. Henderson, 25 Cal.2d 375, 378 [153 P.2d 945] ; Steiner v. Davis, 10 Cal.App.2d 519, 521 [52 P.2d 530] ; Bank of America v. Superior Court, 20 Cal.2d 697, 701 [128 P.2d 357]), and there is but one judgment in the instant case. Where special issues which form only a portion of the controversy between the parties to the action are submitted to a jury and the remaining issues are tried by the court and findings of fact made thereon, no judgment can be entered in the case at the time the jury renders its verdict. The case has not been tried and the trial has not been concluded until the court has rendered its decision disposing of all issues submitted to it, and there is no decision
There is but one judgment in the ease, to wit, the judgment of the court which followed the findings of fact determining all issues both legal and equitable adversely to appellant, which for the reasons herein stated is affirmed. The purported appeal from the void judgment entered on the verdict of the jury is dismissed.
Moore, P. J., and McComb, J., concurred.
Appellant’s petition for a hearing by the Supreme Court was denied November 4,1946. Shenk, J., Edmonds, J., and Schauer, J., did not participate.