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the truthfulness of any statement in the application for the policy, or to relieve the applicant from any warranties therein, or to bind the company by any knowledge he might possess in relation to such statements or warranties, is clearly shown by the terms of the application itself, which expressly limits the power and authority of soliciting agents in those and in all particulars relative to matters pertaining to such application.

An insurance company can, like any other principal, prescribe limitations upon the power and authority of agents, and persons dealing with such agents with knowledge of the limitations upon their authority are bound by the restrictions imposed. Now, in the application made and signed by the insured it was expressly agreed by him that all his answers therein were true; that they should form the basis of the contract of insurance, and, if any were untrue, the policy should be void. He was informed by it plainly that only the officers at the home office had authority to determine whether a policy should issue on the application, and that they acted on the written statements, answers, warranties, and agreements contained in it in determining that matter. It was further expressly declared in the application and agreed to by the applicant that no statements, promises, or information given to the person soliciting the application for the policy should be binding on the company, or in any manner affect its rights, unless reduced to writing and presented to the officers of the company at the home office. Clearly, by these provisions of the application, express notice was given to the applicant that the officers at the home office reserved the exclusive right to determine whether the company would be bound by any statement or information made or presented by its soliciting agents, and then only when such statements were presented to them in writing, and that soliciting agents had no authority or right at all to bind it by any statements. promises made, or information possessed by them. The company had a right to thus limit the authority of its soliciting agents, and the beneficiary under the policy cannot now assert that the company was bound by the information possessed by its soliciting agent and undisclosed to it. when it was expressly declared in the application that the agent had no authority thereby to bind the company, that the company would not be affected by it unless it was forwarded to the officers at the home office for their consideration and action upon it, and the insured had knowledge of this when he made his application. As by the terms of the application and to the knowledge of the insured the soliciting agent had no authority to bind the company in any way, either by express agreement or the possession of any knowledge or information concerning the falsity of any of the statements or warranties contained in the application, mere

possession of knowledge of such falsity was not knowledge acquired within the scope of his authority, and therefore cannot be said to be the knowledge of the company.

Counsel for appellant cites us to cases where the company has been held bound by the conduct of its soliciting and other special agents. But these are cases where either the agents had ostensible authority to act in the matters in question there or had deceived the insured, been guilty of some misrepresentation, or perpetrated some fraud upon him; the insured not being in fault and acting in good faith without notice of any limitation upon the authority of the agent. But the case at bar presents none of these situations. It is not claimed that the agent perpetrated any fraud on the insured, or that he represented he would or had authority to waive the truthfulness of any statements in the application or the accompanying warranty respecting its truth. The position taken here by appellant simply is that, because the agent had information that a statement the assured warranted to be true was false, the mere possession of this knowledge bound the company and relieved the assured from his warranty, notwithstanding it was expressly provided in the application, and the insured knew that the company could not be so bound, and could only be bound by having such information imparted in writing to the home officers, who were authorized to act upon it. This position could only be sustained by holding that it was not competent for the company to limit the authority of its agents and that the insured is not bound by the knowledge of such limitations. Of course, it cannot be so held. In the case at bar there is no question of fraud, deception, or misrepresentation practiced by the agent. The sole question is one of contract. The application contained a limitation on the authority of the agent expressly providing against the company being bound by any information possessed by him not disclosed in the application and declaring the only way it could be bound, namely, by written statements furnished the officers at the home office for their action upon them. The assured knew all this and agreed to it. It was the contract of the parties upon the subject of the agent's authority, and prescribed the only method in which the company could be bound, which it is not pretended was followed; and we know no reason why the assured should not be controlled by the terms of the contract and the limitations on the authority of the agent imposed thereby. New York Life Insurance Co. v. Fletcher, 117 U. S. 519, 6 Sup. Ct. 837, 29 L. Ed. 934; Northern Assurance Co. v. Grand View Ass'n. 183 U. S. 308, 22 Sup. Ct. 133. 46 L. Ed. 213: McCoy v. Metropolitan Life Ins. Co.. 133 Mass. 82: Clemens v. Supreme Council, 131 N. Y. 485, 30 N. E. 496, 16 L. R. A. 33: Dimick v. Met. Life Ins. Co., 69 N. J. Law, 384, 55 Atl. 291, 62 L. R. A. 774.

In discussing this matter we have referred simply to the finding of the court as to the knowledge possessed by Clark, the soliciting agent, who actually solicited the application for the policy by the assured. We have in mind the fact that the court found that Clark had imparted this information to his immediate superior, also a soliciting agent of defendant in charge of the other soliciting agents in Pasadena. That he imparted this information to him does not affect the question. The knowledge of the superior soliciting agent, under the limitation as to the authority of such agents, bound the defendant no more than did the knowledge possessed by Clark.

It follows, from the view we take of the law applicable here, that the insurance company had not waived the warranty made by the assured in his application for a policy relative to paralysis; that knowledge by the soliciting agent of the falsity of this statement as to that matter did not have that effect, in view of the limitation on his authority contained in the application and known to the assured, and the further provision as to the only method by which the warranty might be waived by the company; that the judgment is supported by the finding that there was a breach of such warranty, and is

affirmed.

We concur: MCFARLAND, J.; SLOSS, J.; HENSHAW, J.

ANGELLOTTI, J. I concur in the judgment, and generally in what is said in the opinion. I, however, base my concurrence solely upon the presence in the application for the policy of the provision set forth in the opinion, and the knowledge thereof which, by the record before us, must be imputed to the applicant at the time he made the application. Mr. Cooley, in his Briefs upon the Law of Insurance, states that the general rule that the knowledge of an insurance agent is imputable to the company applies also, in most instances, to a soliciting agent with reference to matters made known to him prior to the execution of the policy. Volume 3, p. 2524 et seq. This declaration appears to be supported by many decisions. But where the company has, to the knowledge of the applicant, expressly provided that it shall in no way be bound by any knowledge possessed by the soliciting agent, and that, as to matters covered by the questions asked the applicant, it acts solely upon the written information furnished by the applicant to the home office, in determining whether or not a policy shall issue, which is the effect of the provision in question, I do not see how the company can be held to be bound by the mere knowledge of the soliciting agent of the falsity of an answer knowingly made by the applicant.

I concur: SHAW, J.

(151 Cal. 701)

WOOLLACOTT et al. v. MEEKIN. (L. A.

1,808.)

(Supreme Court of California. Aug. 19, 1907. Rehearing Denied Sept. 18, 1907.)

1. MUNICIPAL CORPORATIONS - STREET PROVEMENTS-CONTRACTS-VALIDITY.

IM

A contract for a street improvement, providing that all damage arising from the nature of the work to be done should be sustained by the contractor and that the latter should indemnify the city from all suits against it on account of any damages from the actions of the contractor, was void as imposing conditions naturally tending to increase the cost of the work and add to the burden of the property owners. 2. SAME ACTION TO ANNUL ASSESSMENT — PARTIES-MISJOINDER.

In an action to annul an assessment for street improvements and bonds issued thereunder constituting a lien on land owned by plaintiffs, on the ground that the contract for the improvements was void, no substantial right of defendant was affected by the joinder as plaintiffs of several owners of separate lots of land not claiming under a common source of title. 3. APPEAL AND ERROR-MISJOINDER OF PÅRTIES-HARMLESS ERROR.

A judgment, after trial on the merits, will not be reversed because the court impropery overruled a demurrer on the ground of mi joinder of parties, where such misjoinder .. not affect any substantial right of a party. [Ed. Note.-For cases in point, see Cent. Dig. vol. 3, Appeal and Error, § 4098.]

4. MUNICIPAL CORPORATIONS - STREET PROVEMENTS-VOID ASSESSMENTS.

IM

Where proceedings for street work were void ab initio, there was no moral obligation on the part of the owners of land abutting on the street to pay any part of an invalid assessment made for such street work, so that a tender of the amount properly due was not a condition precedent to the right to sue to set aside the assessment.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 36, Municipal Corporations, § 1200.]

Beatty, C. J., and Shaw and Lorigan, JJ., dissenting.

In Bank. Appeal from Superior Court, Los Angeles County; Waldo M. York, Judge.

Action by H. J. Woollacott and others against Cora L. Meekin, substituted for D. A. Meekin. Judgment for plaintiffs, and defendant appeals. Affirmed.

Munson & Barclay, for appellant. O. B. Carter, for respondents.

ANGELLOTTI, J. This is an action by 12 persons, owning separate lots of land in the city of Los Angeles, to obtain a decree de. claring void and annulling a certain assessment upon their land for street work done on Mott street, in said city, and the bonds issued thereon, constituting a lien on said land. Judgment was given in favor of plaintiffs, and defendant appeals therefrom.

Upon the question as to the validity of the assessment and bonds it will be necessary to notice but one of the objections of plaintiffs. The street work done consisted of the grading and graveling of a portion of Mott street, and the construction therein of a cement curb, a redwood curb, a cement sidewalk, and a cobble-paved gutter. The vari

ous proceedings of the city officials, from and including the resolution of intention to and including the rontract for the work, provided that the work should be done in accordance with certain described specifications on file in the office of the city clerk of said city. By reference, these specifications were expressly made a part of the contract, and this inclusion of such specifications as a part of the contract was, of course, authorized by the reference thereto in the anterior proceedings. The specifications so referred to in all the proceedings were separate specifications for the different kinds of work. Each of these specifications contained the following provisions: "All loss or damage arising from the nature of the work to be done under this agreement, or from any unforeseen obstruction or difficulties which may be encountered in the prosecution of the same, or from the action of the elements, or from any incumbrances on the lines of the work, or for any act or omission on the part of the contractor, or any person or agent employed by him, not authorized by this agreement, shall be sustained by the contractor. * ** The contractor shall indemnify and save harmless the city of Los Angeles from all suits and actions of every name and description brought against it for or on account of any damages received or sustained by any party or parties, or by or from any of the acts of or anything done by said contractor, his servants, or agents in the prosecution of said work." italics are ours. These two provisions were in no way connected, and were apparently separate and independent stipulations.

The

The question as to the effect on the assessment and bonds of the italicized portion of the first of these provisions is determined by the decision of this court in Blochman v. Spreckels, 135 Cal. 662, 67 Pac. 1061, and Goldtree v. Spreckels, 135 Cal. 666, 67 Pac. 1091. These were actions to restrain a purchaser at sales made on bonds issued on an assessment for street work in the city of Coronado from applying for a deed, and to quiet the owner's title as against such sales. There was an ordinance of the city providing that the work "shall be done in accordance with the following specifications," which ordinance was held to constitute a part of the contract for the work. That ordinance, after specifying the manner of doing the work and the materials to be used, provided, among other things, as follows: "All loss or damage arising from the nature of the work to be done under these specifications shall be sustained by the contractor." It will be observed that the only difference between this and the italicized portion of the provision in the case at bar is in the use of the words "these specifications," instead of "this agreement." This difference in verbiage is clearly immaterial. The provisions are substantially the same, and necessarily mean the same thing, unless the connection in which they are used makes a difference. There

was also a provision in the cases cited that the contractor "shall hold the city harmless for any and all suits for damages arising out of the construction of said improvements." This court held that, while a fair construction of the other provisions might warrant a conclusion that they referred only to damages resulting from the negligence of the contractor in prosecuting the work, the provision as to loss or damage arising from the nature of the work had a broader meaning, and incl: ded practically any damage for which the city would be liable which might originate "in the nature of the work to be done." It was held, citing Brown v. Jenks, 98 Cal. 10, 32 Pac. 701, and Alameda Macadamizing Co. v. Pringle, 130 Cal. 226, 62 Pac. 394, 52 L. R. A. 264, 80 Am. St. Rep. 124, that such a provision was not only unauthorized by statute, but that it imposed conditions naturally tending to increase the cost of the work and increase the burden of the property owner, and the judgments giving the owners the relief sought on account of the invalidity of the assessment and bonds were affirmed.

So far as the question as to the proper construction of the provision under discussion is concerned, there is no material difference between the case at bar and the cases of Blochv. Spreckels, supra, and Goldtree v. Spreckels, supra. The added clauses present in the case at bar in no degree tend to affect the force or meaning of what is clearly a separate and independent provision as to the loss or damage arising from the nature of the work to be done. The words "which may be encountered in the prosecution of the same" can be read only as applicable to the clause "or from any unforeseen obstruction or difficulties," immediately preceding. The second provision in the case at bar is obviously a separate and distinct provision, having no reference to the provision relating to damages arising from the nature of the work, and in no degree affecting the meaning thereof. No principle of construction would justify the conclusion that this provision was intended to detract from the effect of the former provision, and relieve from the burden thereby imposed. There is no merit in the contention that the unauthorized provision was not a "specification" as to the materials to be used, and the manner of doing the work, and, therefore, was not included in the reference to the specifications made in the preliminary proceedings. Whether or not the provision is, in strictness, a "specification," it was a part of each of the documents on file referred to, entitled simply "Specifications No. 68, for the Construction of Graveled Streets in the City of Los Angeles," "Specifications No. 54, for the Construction of Cement Curbs in the City of Los Angeles," etc.. and was manifestly included in that term, both in the documents entitled "Specifications" and the references thereto, just as it was in the ordinance involved in the Spreckels Cases above

cited. See, also, Brown v. Jenks, 98 Cal. 10, 32 Pac. 701. It is apparent that, unless the decisions in Blochman v. Spreckels, supra, and Goldtree v. Spreckels, supra, are to be overruled, the assessment and bonds here involved must be held void. While those cases were decided in department, the decisions were practically by the court in bank, for Blochman v. Spreckels was decided by department 1, and Goldtree v. Spreckels was decided on the same day on the authority of the Blochman Case by department 2. All of the then justices of this court except the Chief Justice then gave their adherence to the views there expressed, and applications for a rehearing in bank denied. These decisions, given February 28, 1902, constitute a rule of property declared by this court, upon the faith of which, we must assume, parties have acted in their dealings in regard to lands. The construction given by these decisions to the provision in question was certainly a permissible one. Under these circumstances, we would not feel warranted in overruling such decisions, even if we felt that a different construction might have been given to that provision. It is to be noted in this connection that the proceedings for the street work here involved were inaugurated by the city of Los Angeles nearly one year after the decisions above referred to.

A demurrer was interposed to the complaint in the court below, and overruled. We have deferred consideration of the points made relative to this ruling, as they can be disposed of more briefly in the light of the knowledge afforded by what we have said as to the merits of the case. It was urged by the demurrer that there is a misjoinder of parties plaintiff and causes of action, in that several owners of separate lots of land not claiming under a common source of title are joined in an action to have the assessment and bonds issued thereunder, constituting liens on the several parcels, declared void. It is unnecessary to consider the argument of learned counsel for plaintiffs in support of this joinder. Assuming, for the purposes of this decision, that there was a misjoinder, it is apparent that no substantial right of the defendant was affected thereby. Defendant's claim as to each and all of the lots was based entirely upon the validity of the legal proceedings, common to all the lots, leading up to the assessment. Those proceedings were, as we have seen, ineffectual for any purpose, and void. No prejudice could possibly result to defendant from having that question determined in a single proceeding mantained by the different owners. On the contrary, in at least one respect, such a course was manifestly to his advantage, namely, in the matter of costs and attorney's fees. It seems to be thoroughly settled that a judgment after trial upon the merits will not be reversed because the court improperly overruled a demurrer on the ground of misjoinder of parties, where it is plain that such mis

joinder did not affect any substantial right of a party. See Daly v. Ruddell, 137 Cal. 671, 674, 70 Pac. 784; Hirshfeld v. Weill, 121 Cal. 13, 15, 53 Pac. 402; Asevado v. Orr, 100 Cal. 203, 300, 34 Pac. 777; Reynolds v. Lincoln, 71 Cal. 183, 185, 9 Pac. 176, 12 Pac. 449. This is but an application of the rule declared by section 475, Code Civ. Proc., that the court must disregard errors and improper rulings not affecting the substantial rights of the parties.

It is urged that the complaint is fatally defective, in that there is no allegation that plaintiffs ever offered to pay what the street improvements were reasonably worth to their lots. It is said that they cannot have the equitable relief sought without doing equity. The equitable maxim thus invoked has no application under the facts shown by the complaint. We have here proceedings for street work had, presumably, without the consent of the landowner, which were void ab initio. They, could not serve as a sufficient foundation for any assessment, and for this reason the entire assessment was void. It cannot be held upon the facts shown that there was any moral obligation on the part of the owner to pay any part of such an invalid assessment. The mere fact that the street work called for by the invalid proceedings and contract has been done does not create such a moral obligation. moral obligation. The case in this respect is

the same as Chase v. Treasurer, etc., 122 Cal. 540, 55 Pac. 414, where it was held, in an action by the owner to restrain a sale on such a bond, that, as the entire assessment was void and there was no tax to be tendered, no tender was essential to the maintenance of the action. The case here does not fall within the doctrine of the cases cited by defendant, nor within that of the later cases (not cited) of Ellis v. Witmer, 134 Cal. 249, 66 Pac. 301, and Couts v. Cornell, 147 Cal. 560, 82 Pac. 194. 109 Am. St. Rep. 168, in the latter of which the application of the maxim relied upon is fully discussed.

There is no merit in the claim that, if the assessment and bonds are void, they cast no cloud upon the title of plaintiffs. The invalidity is not apparent upon an inspection merely of the assessment, warrant, and diagram, and the bonds, which constitute prima facie evidence of the validity of the proceedings, and the owners of the land, in any action founded upon a deed issued in proceedings to enforce the lien of the bonds, would be required to offer evidence to defeat a recovery. The precise point here made was made in Chase v. Treasurer, etc., supra, and decided against the contention of defendant.

There is no other point requiring consideration.

The judgment is affirmed.

We concur: SLOSS, J.; MCFARLAND, J.; HENSHAW, J.

I dissent: BEATTY, C. J.

SHAW, J. I dissent. In my opinion the clauses of the so-called specifications, upon which the validity of the assessment in the prevailing opinion is based, were not incorporated in the contract and proceedings leading up to the assessment and formed no part thereof. In the first place, the reference in the proceedings and in the contract are to things designated therein as "specifications," and the extent of the incorporation of the documents thus designated into those proceedings and contract must be confined to that which constitutes the specifications alone. In Baltimore & O. R. Co. v. Stewart, 79 Md. 487, 29 Atl. 964, speaking of a reference of this character in a building contract, the court says: "The · term 'specifications,' as thus used in contracts of this kind, ordinarily means a detailed and particular account of the structure to be built, including the manner of its construction and the materials to be used." In the second place, the purposes for which the documents called "specifications" are referred to are limited by the words in which the several references are couched. The proceedings and contract called for five separate classes of work, for each of which separate specifications were referred to. These specifications These specifications were evidently general specifications prepared in pursuance of some city ordinance and filed with the clerk, to be made applicable to all subsequent proceedings for the particular classes of work. The work required to be done by the contract and proceedings included the grading and graveling of the street, the construction of a cement curb along part of its course, a redwood curb along another part, a cement sidewalk, and a cobble paved gutter. 'As an illustration of the method of reference, the ordinance of intention provided, with respect to grading and graveling, that the street should be "graded and graveled in accordance with the plans and profile in the office of the engineer and specifications for the construction of graveled streets in the city of Los Angeles on file in the office of the city clerk of said city, said specifications being numbered 6S," and provided, with respect to curbing, that "a cement curb be constructed * in accordance with specifications for constructing cement curbs, on file in the office of the city clerk, said specifications being numbered 54." was used with respect to each of the other classes of work. In the notice for street work, in the ordinance declaring that the work should be done, in the notice inviting proposals for the work, and in the notice of award of the contract, the language above quoted was repeated word for word with respect to each class of work. In the contract the references with respect to each particular. class of work are again repeated in the same language as in the resolution of intention and other documents. It further provides that the contractor "promises and agrees * * * that he will do and perform, or cause to be done and performed, in a good and workman

Similar language
Similar language

like manner, under the direction and to the satisfaction of the said street superintendent. all of the following work [here follows the description with references as above mentioned] * * * according to the specifications on file in the office of the city clerk of said city, which are known as 'specifications Nos. GS, 54, 52, 55, and 51,' and made part of this contract."

The specifications provide with great detail the manner in which the work is to be done and the materials of which it is to be composed. Each is prefaced by a heading indicating the purpose for which they were originally adopted by the council. For instance, that relating to the cement curbs is as follows: "Specification No. 54, for the Construction of Cement Curbs in the City of Los Angeles." The others are in the same language, thus demonstrating that the specifications were prepared as specifications of construction alone. There is nothing in the proceedings, or in the contract, expressing any purpose to refer to the specifications for the details respecting the rights, obligations, or liabilities of the contractor or of the city. The two clauses in the documents called "specifications," which are supposed to create liabilities against the contractor, and which are declared to have the effect of making the entire proceedings invalid, have no reference whatever to the construction of the work required to be done, nor to the materials of which that work is to be composed. It is true that the contract. after referring to the specifications, contains the statement that they are made part of the contract. This language, by grammatical construction, is limited in its meaning to the specifications previously referred to, and manifestly relates solely to the specifications of the manner of doing the work and the materials to be used therein. It does not have the effect of incorporating into the contract other parts of the document called "specifications," which have no reference whatever to the work, but only to the rights and liabilities of the parties. In Short v. Van Dyke, 50 Minn. 286, 52 N. W. 643, the court, referring to the extent to which a separate document was made a part of a contract by a reference thereto, states that "if the reference be made for a particular purpose, expressed in the contract, it becomes a part only for that purpose." In Neuval v. Cowell. 36 Cal. 650, where other documents were referred to for matter of description, the court said that the other documents were admissible in evidence as part of the agreement, to aid the contract in regard to the description, and that "for any other purpose they were foreign to the case." This rule is in strict accordance with the rules by which contracts are to be construed. The document referred to, not being signed by the parties, is incorporated in-it only for the purpose of supplementing the contract to the extent to which the contract itself is deficient, and its use must be confined and lim

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