(151 Cal. 630) GREENAWALT et al. v. ROGERS. (L. A. 1,842.)

(Supreme Court of California. Aug. 12, 1907. Rehearing Denied Sept. 10, 1907.)

1. CANCELLATION OF INSTRUMENTS-FRAUDCONSENT.

Civ. Code. § 1689, provides that a contract may be rescinded if the consent of the party rescinding was given by mistake or obtained through duress, fraud, or undue influence, and section 1568 declares that consent is deemed to have been obtained through one of such causes only when it would not have been given had such cause not existed. Held, that a written instrument could not be rescinded for fraud when it appeared that consent would have been given and the contract entered into if the fact misrepresented had been truthfully stated.

[Ed. Note. For cases in point, see Cent. Dig. vol. 8, Cancellation of Instruments, § 2.] 2. COMPROMISE AND SETTLEMENT - FRAUDVACATION.

Plaintiff having recovered judgment against defendant for $2.563.09, defendant represented that he had lost all his money in Alaska, was without funds, and was engaged as a common laborer at not exceeding $1.50 a day, and it was impossible to pay any portion of his debts, but offered a note, with his brother as surety, for $100, in full satisfaction of the judgment. This was accepted, the note paid, and the judgment satisfied. Thereafter plaintiff sued to set aside the satisfaction for fraud, alleging that defendant was in fact rich at the time of settlement. The proof, however, disclosed that defendant's statements as to his impecunious condition were true, except that he did own a lot of the value of $400, which was not disclosed, and that his debts were upwards of $15,000. Held, that such misrepresentation was insufficient to justify the vacation of the settlement.

[Ed. Note. For cases in point, see Cent. Dig. vol. 8. Cancellation of Instruments, § 2.]

In Bank. Appeal from Superior Court, Los Angeles County; W. P. James, Judge.

Action by Henry Greenawalt and another against Ralph Rogers. From a judgment for plaintiff, and from an order denying defendant's motion for a new trial, he appeals. Reversed and remanded.

McNutt & Hannon, Will D. Gould, and Jas. H. Blanchard, for appellant. H. L. Dunnigan, for respondents.

SLOSS, J. This is an action brought to obtain a decree canceling and setting aside a satisfaction of judgment claimed to have been entered in reliance upon fraudulent representations by the defendant. The trial court made a decree in favor of the plaintiffs, and the defendant appeals from the judgment and from an order denying his motion for a new trial.

The complaint alleges that in June, 1890, one A. H. Judson recovered a judgment against the defendant, Ralph Rogers, for $1.793.95. In July, 1895, A. H. Judson transferred the judgment to the plaintiff Greenawalt for collection, under an agreement that Greenawalt should receive one-third of all sums collected, and A. H. Judson the remaining two-thirds. Shortly after the assignment Greenawalt brought an action upon the as

signed judgment, and in said action recovered judgment against Rogers for $2,563.09. In May, 1902, the defendant, Rogers, represented and stated to A. II. Judson that he had been absent in Alaska; that he had lost all the money that he had made during his stay in Alaska; that he was absolutely without funds, property, or expectations of any description; that he was engaged as a common laborer for his brother at wages not exceeding $1.50 per day; that it was absolutely, impossible at that time, and in all probability would in the future be absolutely impossible, for him to pay any portion of his debts or obligations; that he was largely indebted to other persons, and that his absolute necessities of life and the absolute necessities of his family consumed all that he could possibly earn at that time; that if the said Judson would cause satisfaction of the judgment, then outstanding in the name of the plaintiff Greenawalt, to be entered of record, and accept the sum of $100 in full satisfaction of said judgment, he, the said Rogers, would execute and deliver to said Judson his promissory note for the sum of $100 and procure his (Rogers') brother to execute the said note as surety for him. Rogers further represented that the said $100 was the utmost that he would be able to pay upon said judgment, and that, unless Judson and Greenawalt accepted it, they would entirely lose their claim. These representations were communicated by A. HI. Judson to Greenawalt, and said Greenawalt and Judson, fully believing said statements and relying upon them, and by reason of such belief and reliance, accepted the proposition and the said promissory note for $100. The promissory note was paid about the 20th day of July, 1902, and on the 23d day of July, 1902, Greenawalt acknowledged upon the margin of the record full and entire satisfaction of the judgment. The plaintiffs allege that all of these statements of the said defendant were false, fraudulent, and made with the purpose and design to deceive Greenawalt and A. H. Judson, and to procure from them satisfaction and release of the said judgment; that, in fact, the said Rogers at the time of making said representations was absolutely solvent; that he had brought with him from Alaska personal property exceeding in value the sum of $60,000, and had in his possession and was the owner of money and other personal property exceeding in value the sum of $60,000, which facts he fraudulently concealed from Greenawalt and A. H. Judson. Plaintiffs allege, further, that at the time of the representations Rogers did not owe debts exceeding the sum of $15,000, and that during all of said time he was worth money and other personal property in the sum of $45,000 over and above all his just debts and obligations. The plaintiffs allege that they, and the said A. H. Judson, did not discover the said fraud practiced upon them until about the 15th day of May, 1904. On or about the 30th day of

June, 1904, it is averred the said A. H. Judson assigned to W. B. Judson all his interest in and to the cause of action herein set out. The prayer of the complaint is for the cancellation of the satisfaction of judgment, and that plaintiffs recover judgment against Rogers in the sum of $2,563.09, together with interest thereon from the 11th day of September, 1896, less the sum of $100. The complaint was filed July 5, 1904. By an amendment to the complaint filed April 17, 1905, the plaintiffs allege that at the time of making the statements above set forth, the defendant was the owner in fee simple and vested with the legal title to real property in the county of Los Angeles of the value of $750, and that at said time he was the owner of other real property in said county standing in the name of other persons who held for his use and benefit, which said real property was of the value of $6,000, all of which facts were by the said Rogers fraudulently concealed from the plaintiffs, who were absolutely ignorant of said facts, and did not discover them except as alleged in their complaint. The answer denied the making by defendant of the representations set forth in the complaint, and denied the ownership by defendant of the real or the personal property alleged in the complaint to have been owned by him. The answer also denies the assignment by A. H. Judson to the plaintiff W. B. Judson.

The findings are in favor of plaintiffs on the issues raised as to the making of the representations. But it is found by the court that at the time of making such representations the defendant did not own, or have in his possession, money or personal property of the value of $60.000, or any part or portion thereof, other than a very small amount, which was necessary for his own support. The court further finds against the allegation of the complaint that at the time of the settlement Rogers was solvent, and against the allegation of the amendment that he was the owner of real property, standing in the name of others, of the value of $6,000. It finds, however, that at the time of making the representations the defendant, Rogers, was the owner of lot 14, block 1, of Garvanza addition No. 1 of the city of Los Angeles, and that this property was of the value of $400, and that Rogers did at the time of the settlement conceal from A. H. Judson and from Greenawalt the fact that he owned this property, and that he did so conceal this fact with the intent and purpose of thereby inducing Greenawalt and Judson to satisfy and compromise said judgment. There is a finding against the allegation that A. II. Judson had assigned his cause of action to the plaintiff W. B. Judson.

From these findings, the court draws the conclusion of law that the plaintiff H. Greenawalt is entitled to a judgment canceling and setting asile the satisfaction of judgment entered of record by him, and that he is

entitled to a judgment against the defendant Rogers for the amount claimed in the complaint. complaint. A decree was entered accordingly, canceling such satisfaction and giving the plaintiff Greenawalt judgment against Rogers for $4,017.97, together with costs.

It is argued on behalf of the appellant that the complaint is defective in failing to allege that plaintiff promptly upon the discovery of the alleged fraud, and prior to the commencement of the action, offered to restore to the defendant the $100 received from him. Civ. Code, § 1691; Kelley v. Owens, 120 Cal. 502, 47 Pac. 369, 52 Pac. 797. The appellant makes the further points that A. H. Judson was a necessary party, that any rights which the respondent Greenawalt may have had are barred by laches, and that the evidence is insufficient to justify the finding that Rogers was the owner of the lot in Garvanza addition, valued at $400. It will not be necessary to consider the soundness of any of these contentions, since we are satisfied that the findings, read in connection with the averments of the complaint, do not show such misrepresentation or concealment of a material fact as would justify the setting aside of the contract of compromise.

The complaint sets forth a clear case of aggravated fraud. The representation that defendant was without means, when in fact he was the owner of realty of the value of $6.750, and personalty of the value of $45,000 over and above his debts, was a fraud which, if followed by proper action on the part of the defrauded parties, would furnish abundant cause for relieving them against a settlement whereby they accepted $100 in satisfaction of an undisputed claim of several thousand dollars. But respondent fell far short of establishing the case which he had set out to prove. From the findings it appears that the defendant, instead of having $45.000 of personal property applicable to the payment of his debts, had none, and, instead of owning real property worth $6.750, owned but a lot of the value of $400. While there is a gross disproportion between the amount paid in compromise and the resources of the defendant, as alleged in the complaint, this disproportion becomes less, if, in fact, it does not disappear, when the price of the settlement is compared with the actual amount of defendant's means, as found by the court. When it is considered, further, that the effect of the decree is to subject the defendant to a judgment indebtedness of over $4,000, on account of a claim which he had settled several years before by a payment of $100, the facts on which the decree is based should be scrutinized with care to determine whether they justify such a result.

As was said by this court in Colton v. Stanford, 82 Cal. 351, 398, 23 Pac. 16, 28, 16 Am. St. Rep. 137. quoting the language of Judge Temple, who had presided at the trial of that case in the lower court: "The power

A

to cancel a contract is a most extraordinary power. It is one which should be exercised with great caution-nay, I may say with great reluctance unless in a clear case. too free use of this power would render all business uncertain, and, as has been said, make the length of a chancellor's foot the measure of individual rights. The greatest liberty of making contracts is essential to the interests of the country. In general, the parties must look out for themselves." See, also, Oppenheimer v. Clunie, 142 Cal. 313, 75 Pac. 899.

Our Code provides that a contract may be rescinded if the consent of the party rescinding was given by mistake, or obtained through duress, menace, fraud or undue influence. Civ. Code, § 1689. Section 1567 provides that "An apparent consent is not real or free when obtained through: (1) Duress; (2) menace; (3) fraud; (4) undue influence; or (5) mistake." Section 1568: "Consent is deemed to have been obtained through one of the causes mentioned in the last section only when it would not have been given had such cause not existed." It is the law everywhere that a misrepresentation must, in order to afford a basis for complaint by the party to whom it was made, have been with reference to a material fact. 20 Cyc. p. 23. Section 156S above quoted furnishes a rule for determining what misrepresentations or concealments are to be deemed material.

is said by the court in Colton v. Stanford, supra, at page 399 of 82 Cal., and page 28 of 23 Pac. [16 Am. St. Rep. 137]: "The sections of the Civil Code above quoted [sections 1565, 1566, 1567, 1568] are clear and unambiguous in language, and they seem to establish the rule beyond all controversy that the contract cannot be rescinded when it appears that consent would have been given and the contract entered into notwithstanding the duress, menace, fraud, undue influence, or mistake relied upon. A misrepresentation as the basis of rescission must be material; but it can be material only when it is of such a character that, if it had not been made, the contract would not have been entered into. The misrepresentation, it is true, need not be the sole cause of the contract, but it must be of such nature, weight, and force that the court can say 'without it the contract would not have been made.'" Pom. Eq. Jur. § 890; Elliott v. S. P. Co., 145 Cal. 441, 448, 79 Pac. 420, 68 L. R. A. 393; Spinks v. Clark, 147 Cal. 439, 444, 82 Pac. 45. Was there such misrepresentation of a material fact in the case at bar? The defendant represented that he had been absent in Alaska; that he had lost all the money that he had made there; that he was absolutely without funds, property, or expectations of any description; that he was engaged as a common laborer for his brother at wages not exceeding $1.50 per day; that he was largely indebted to other persons; and that the sum of $100 was the

utmost that he would be able to pay. None of these statements is found by the court to have been untrue, except the statement that he was without funds or property of any description, and this was untrue only to the extent that he was the owner of a lot of the value of $400. The complaint alleges that Rogers at no time owed debts exceeding the sum of $15,000. This form of allegation amounted to an assertion, by implication at least, that the defendant was indebted to the extent of $15,000. Taken together with the further averment that he owned personal property of the value of $60,000, and was possessed of $45,000 over and above his just debts and obligations, it shows that the complaint was framed upon the theory that Rogers, at the time of making the representations complained of, had debts amounting to $15,000. The respondent himself treats such indebtedness as an established fact, for in his brief he says that "the answer did not deny that the defendant owed the sum of $15,000." The judgment satisfied amounted at the time of the settlement to about $3,500. This was less than one-fourth of the total indebtedness of Rogers. If, therefore, this lot, which is the only property found by the court to have been owned by him, had been applied to the payment of his debts pro rata, whether by voluntary agreement, or through the bankruptcy proceedings, which, as the complaint alleges, the defendant was contemplating, the share which plaintiff and A. H. Judson could have received would have been less than the $100, which they did in fact receive. If Rogers' ownership of this lot had been made known by him, the plaintiff Greenawalt would have been confronted with this situation: Ile would have been informed that Rogers had debts amounting to $15,000, about $3,500 of which was owing on the judg ment in question, that he had absolutely no property with the exception of a lot worth $400, and that the sum of $100 was the utmost that he would be able to pay upon the judgment in question. The essence of the representations upon which Greenawalt and A. H. Judson acted was the statement that $100 was all Rogers was able to pay upon their judgment. It was their belief that this representation was true that induced them to accept this sum. It is not conceivable that their action would have been different if they had been advised of further facts which were in no degree inconsistent with this ultimate and important fact. Under these circumstances, the concealment by Rogers of his ownership of this $400 lot cannot be regarded as material to the settlement.

The court does not in terms find that this concealment was with reference to a material fact, nor that without such concealment the consent of plaintiffs would not have been given. All that is found is that Greenawalt and A. H. Judson fully believed and relied upon each of the statements of the defend

ant in regard to his financial condition and his inability to pay the judgment, and that by reason of such belief and reliance they accepted the proposition. Most of the statements, however, and all of them which, under the facts alleged and found. can be regarded as material, are found by the court to have been true. It must follow that the findings are not sufficient to support the judgment, since they do not show that the consent of the plaintiff and A. H. Judson was obtained by fraud.

The judgment and order appealed from are reversed, and the cause remanded for a new trial.

We concur: SHAW, J.; MCFARLAND, J.; HENSHAW, J.; LORIGAN, J.; ANGELLOTTI, J.

(151 Cal. 667)

PEOPLE v. BUCK. (Cr. 1,370.) (Supreme Court of California. Aug. 14. 1907.) 1. CRIMINAL LAW-APPEAL-ORDER DENYING CONTINUANCE.

Pen. Code, § 1237, provides that a defendant may appeal from a judgment of conviction, from an order denying a motion for a new trial, or from an order made after judgment, affecting his substantial rights, and section 1173, subd. 2, provides that exceptions may be taken by defendant to a decision of the court on a matter of law in refusing to postpone the trial on his motion. Held, that an order denying accused a postponement of trial was reviewable on appeal from the judgment, and was not itself appealable.

[Ed. Note.--For cases in point, see Cent. Dig. vol. 15, Criminal Law, § 2585.]

2. SAME-RECORD-BILL OF EXCEPTIONS.

In order that defendant may obtain a review of an order denying a continuance in a criminal case, the motion, evidence and ruling must be incorporated in the bill of exceptions, as required by Pen. Code, § 1174.

3. SAME CONTINUANCE-DENIAL.

Defendant was informed against for murder on February 3d, and was arraigned on the 5th, when counsel was appointed for him, and his time to plead extended until the 7th. A demurrer to the information was filed on that day, which was overruled, when he pleaded "not guilty," and the cause was set for trial on March 12th. Defendant protested at that time, claiming that as his defense was insanity, there was not sufficient time to procure the necessary evi dence as to his personal and family history, and applied for a postponement for absence of cer tain witnesses whom he expected to testify concerning his insanity, and also because of his inability to obtain the depositions of certain alienists. Held that, all the witnesses so desired, except a nonresident alienist, having appeared and testified at the trial, the denial of the postponement was not error.

[Ed. Note.--For cases in point, see Cent. Dig. vol. 15, Criminal Law, §§ 3045, 3046.]

4. SAME-LOCAL PREJUDICE.

5. HOMICIDE-INSANITY-QUESTION FOR JURY. In a prosecution for homicide, evidence held to require submission to the jury of the question of defendant's insanity.

6. CRIMINAL LAW-MODIFICATION OF INSTRUCTIONS-PREJUDICE.

In a prosecution for homicide, defendant requested an instruction that the testimony of nonexperts was recognized as proper in support of the defense of insanity, and that the jury was not bound by the statement or testimony of such witnesses nor were they justified in disregarding them, but that it was the jury's duty to give such testimony the weight to which it was entitled. Held, that the latter portion of the instruction was a mere commonplace, and that defendant was not prejudiced by the court's elimination thereof.

[Ed. Note. For cases in point, see Cent. Dig. vol. 15, Criminal Law, § 3154.]

An instruction that the abstract opinion of any witness, medical or of any other profession, is of no importance, but that it was a juror's duty to arrive at his conclusion on his own judgment, exercised in a reasonable way after carefully weighing all the evidence, and that no judicial tribunal would be justified in deciding for or against the legal responsibility of one charged with insanity on the opinion of witnesses, however numerous or respectable, was properly refused.

[Ed. Note. For cases in point, see Cent. Dig. vol. 14, Criminal Law, § 1732.]

9. HOMICIDE - DEFENSES - INSANITY INSTRUCTIONS-FALSE ISSUE.

Where, in a prosecution for homicide, defendant relied on actual insanity as a defense, an instruction that irresistible impulse to do an act known by the perpetrator to be wrong does not relieve him from its legal consequences was not erroneous as presenting a false issue.

10. CRIMINAL LAW-ARRAIGNMENT FOR SENTENCE-TIME.

Where a verdict convicting accused of murder was returned on March 21st, and defendant was arraigned for sentence on the 24th, the court did not err in refusing to grant a postponement of the sentence, in the absence of a showing in support of defendant's application for further time to procure affidavits as to newly discovered evidence in support of that ground for new trial. 11. SAME-NEW TRIAL-MOTION-ARGUMENT— LIMITATION OF TIME.

Where accused had been convicted of murder, it was not error for the court to limit his counsel's time to argue a motion for new trial to an hour.

12. SAME-APPEAL-BRIEFS-MISCONDUCT

COUNSEL.

OF

On appeal from a conviction of murder, it was improper for counsel for accused to refer to the trial court's action, which was fully justified, as a "brutal abuse of discretion and an inhuman violation of his [defendant's] constitu

91 P.-34

In Bank. Appeal from Superior Court, Los Angeles County; B. N. Smith, Judge. Morris Buck was convicted of murder, and he appeals. Affirmed.

A. D. Warner, for appellant. U. S. Webb, Atty. Gen., Henry T. Gage, and W. I. Foley, for the People.

BEATTY, C. J. The defendant, having been sentenced to death upon conviction of murder, appeals from the judgment and from an order denying his motion for a new trial. He has also given notice of an appeal from an order denying his motion for a postponement of the trial; but, since the ruling upon that motion is reviewable on appeal from the judgment, there is no necessity and no provision for a separate appeal. Pen. Code. §§ 1237, 1173, subd. 2. But to obtain a review of an order denying a continuance in a criminal cause it is necessary to incorporate the motion, evidence, and ruling in a bill of exceptions (Pen. Code, § 1174), and one of the questions here presented is whether it appears by this record that any such bill of exceptions was ever settled or allowed.

The information charging the defendant with the crime of murder was filed on February 3d. On the 5th he was arraigned and, being without counsel, a member of the Los Angeles bar, who represents him on this appeal, was appointed by the court to conduct his defense, and time to plead extended to the 7th. On that day he filed a demurrer to the indictment, which, being overruled, he entered his plea of not guilty. The cause was then set for trial on March 12th.

Assuming for the present that the affidavit subsequently filed in support of the motion for a postponement of the trial (a copy of which is printed in the transcript) can be treated as a part of the record, it appears that counsel for defendant protested very earnestly on February 7th against the fixing of so early a date as March 12th for the trial, upon the ground that his conference with defendant on the previous day had satisfied him that the defendant was insane at the date of the homicide, and that his trial on the 12th of March would not allow sufficient time to procure the necessary evidence as to his personal and family history, or to prepare his defense in other particulars.

This objection was, however, overruled by the court, and on March 12th, when the cause was called for trial, defendant made his motion for a postponement, based upon the affidavit in question.

Many objections of a purely technical character are urged by counsel for the people to any consideration of this affidavit, and if we were disposed to rule with technical strictness in a matter of this kind we might be justified in holding that it is not a part of the record because not strictly and formally included in the bill of exceptions. But in view of the facts that the defendant was without counsel, that counsel appointed by the court was new to the state and unfamiliar with our practice in criminal cases, and

that matters which he was clearly entitled to have had included in the bill of exceptions were probably not so included through mere inadvertence, we are unwilling in a case of such serious import to rest our decision upon grounds so purely technical as that matters which ought to have been shown by the bill of exceptions appear only in the minutes of the court, and that exceptions to the orders denying the continuance and the new trial were not formally entered at the time the rulings were made. Disregarding, therefore, the objections referred to, assuming that exception was taken to the order denying a continuance of the trial, and treating the affidavit submitted in support of the motion as part of the record, we proceed to consider whether there was any error or abuse of discretion in refusing the continuance.

The simple facts of the case are that the defendant applied to a lady by whom he had formerly been employed as a coachman for a loan or gift of money with which to establish himself in business. She did not answer his letter immediately, and he went to her house in the city of Los Angeles armed with a knife, a derringer, and a revolver. Learning that she was not at home, he sat down on the front porch to await her return. When she came she entered the house by a side door, and was informed that the defendant was waiting to see her. She went out to see him, and he renewed his request for money. She excused herself upon the ground that there were so many demands upon her purse, and for some reason-probably because she was alarmed-went in the house and telephoned for her coachman. When she came out again, defendant asked her whom she had rung up, and she told him. Some other conversation ensued, and the defendant, among other things, told her he was desperate. In the end he shot her twice, causing her death within a few moments. He, then, in the presence of several persons who had been attracted to the scene. put his pistol to his own head and inquired, "Gentlemen, shall I do it?" He did not fire, but sat down with his pistol in his lap and waited till an attempt was made to arrest him, when he ran and took refuge in an ice cream parlor, where he was soon after taken in custody. Upon these facts it was very clearly a case of deliberate murder, unless the defendant was insane, and accordingly his sole defense was insanity.

The affidavit of defendant's counsel, which was filed on the 12th day of March, in support of his motion for a postponement of the trial, showed proper diligence upon his part in preparing his defense, and was intended to show that it would have been impossible to secure the attendance of material witnesses on the point of defendant's personal and family history, or the depositions of distinguished alienists, who, in answer to a hypothetical question based upon facts which