(105 Cal. 425)

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RUCKER et al. v. HALL et al. (No. 15,421.) (Supreme Court of California. Jan. 4, 1895.) PLEADING - ELECTION BETWEEN COUNTS FACTS UNKNOWN TO PLAINTIFF SALE OF LAND AGREEMENT FOR COMMISSIONS-CONSTRUCTION. 1. In an action to recover commissions for a sale of real estate under a contract for payment thereof at a certain rate if certain facts were true and at another rate if other facts were true, and all the facts are peculiarly within the knowledge of defendant, plaintiff may state his cause of action in different counts accordingly, and should not be compelled to elect on which he will proceed.

2. A contract running for one year provided that if plaintiff effected a sale of defendant's property he was to receive a certain commission, and in case a sale was made without his aid, or the property was withdrawn from sale, one-half such commission. Held, that a lease by defendant for five years, with the exclusive privilege to the lessee of purchasing at a fixed price at any time before the expiration of the lease, was a sale within the meaning of the contract, entitling plaintiff to one-half the commission.

Commissioners' decision. In bank. Appeal from superior court, city and county of San Francisco; Walter H. Levy, Judge.

Action by J. E. Rucker & Son against Mrs. Hall and another to recover commissions on a sale of real estate. Judgment for defendants, and plaintiffs appeal. Reversed. Jackson Hatch, for appellants. Lloyd & Wood and J. G. Maguire, for respondents.

HAYNES, C. The plaintiffs were realestate brokers at San Jose, doing business as J. E. Rucker & Son. The defendant Mary Hall in writing appointed the plaintiffs her agents for the sale of certain lands, and which authorization contained the following clauses: "The said J. E. Rucker & Son shall have complete control of all sales to purchasers furnished by them or through their agency, and I agree, in case I shall sell or dispose of such property to any customer furnished by said J. E. Rucker & Son, to pay them three per cent. commission on such sales. Should I find a purchaser independent from said J. E. Rucker & Son, or withdraw the property from sale, I agree to pay the said J. E. Rucker & Son one-half of the above commission as compensation for their services in advertising," etc. This contract and appointment was made August 24, 1886, and was "to run for one year, and thereafter until withdrawal of same in writing." This action was brought to recover commissions under said instrument. The complaint contained two counts, the first based upon the second clause above quoted, alleging a sale by Mrs. Hall, made January 11, 1887, and claiming one-half of 3 per cent. commission, amounting to $300; and the second count was based upon the first clause,

sale above mentioned, on the 24th day of August, 1887, found a purchaser, and notified Mrs. Hall thereof, but that she refused, etc. The defendants answered each cause of action, specifically denying each allegation of the complaint. The cause was tried by the court without a jury, and findings and judgment went for defendants, and this appeal is from an order denying plaintiffs' motion for a new trial.

Before any evidence was offered, plaintiffs were required by the court, upon defendants' motion, to elect upon which of the two counts contained in the complaint they would offer evidence and rely for judgment, upon the ground that said counts required different testimony; that evidence which would support one would not support the other. Plaintiffs excepted to the order, and elected to rely upon the first count, and offered no evidence under the second count. The first cause of action was based upon an alleged sale of the property by Mrs. Hall in January, which, if made, entitled the plaintiffs to one-half of the commission they were to receive in case of a sale made by themselves, Mrs. Hall having retained the right to sell to purchasers not furnished by plaintiffs. The second cause of action was based upon a sale made by plaintiffs in accordance with the terms of their contract with Mrs. Hall, which would have entitled them to full commissions. This sale was alleged to have been made in ignorance of the alleged sale by Mrs. Hall some seven months before, and which it is alleged Mrs. Hall concealed from them. Plaintiffs' right to recover under the first cause of action depended upon the fact of a sale having been made by Mrs. Hall. If such sale had in fact been made, their right to recover was clear; while, if no sale had been made by Mrs. Hall, they would as clearly have been entitled to full commissions upon proof of the facts alleged in the second count or cause of action. These causes of action were based upon the same contract, and upon the face of the complaint it would appear clear that the plaintiffs were entitled to recover upon one or the other, according as the proof might be. The allegation of a sale by Mrs. Hall in January was based, as appears from the evidence on the part of the plaintiffs, upon a lease for the term of five years, "with the sole and exclusive privilege of purchasing" the same property upon payment of the sum of $19,000; Mrs. Hall agreeing to accept payments at any time of $1,000 or more, but no conveyance to be executed until at least $5,000 had been paid. This lease and agreement further provided that the lessees should pay rent for the premises at the rate of $125 per month, payable quarterly in advance, and, in default of such payment of any installment of rent for 30 days after it became due, the right to purchase the lands should terminate, and the

lessor, the defendant here, should "have the right to claim an abandonment thereof." Whether the lessees had made payments entitling them to a conveyance, or whether a conveyance had in fact been made, or whether they had forfeited the right to purchase, and, if so, whether Mrs. Hall had exercised the right to claim an abandonment of the contract of purchase under the terms of the contract, were facts peculiarly within the knowledge of the defendants, and which could not be certainly known to the plaintiffs. The subject of the action was the recovery of commissions under a single contract for the payment thereof at a certain rate under one set of circumstances and at a different rate under different circumstances. I think all the facts might properly have been stated in a single count, as, under those facts, the ultimate question was as to the amount of commissions to which the plaintiffs were entitled. But the defendants could not have been prejudiced by the more logical and technical mode of pleading adopted by the plaintiffs. The uncertainty as to the facts above noticed justified that mode of pleading, and the court erred in requiring the plaintiffs to elect between the counts, and to rely upon one only. Wilson v. Smith, 61 Cal. 209; Sadler v. Olmstead, 79 Iowa, 121, 44 N. W. 292; Longprey v. Yates, 31 Hun, 432; Blank v. Hartshorn, 37 Hun, 101; Whitney v. Railway Co., 27 Wis. 327. In the case last cited it was held that, where the plaintiff cannot know, before the evidence is all in, the precise nature and limits of defendant's liability to him, he may state his cause of action variously in different counts of the complaint, and should not be compelled to elect upon which he will proceed.

The court found that plaintiffs accepted the said contract or authorization orally, and advertised said property for sale, but did not perform any other covenant or condition therein agreed by them to be performed. So far as the first cause of action is concerned,-and upon that alone the cause was tried, the latter part of the finding is outside of any issue; since, by the contract, if Mrs. Hall sold the property to a purchaser not procured by plaintiffs, she was to pay one-half commissions as a compensation for advertising. The finding is, therefore, that, so far as their right to recover upon that count is concerned, they fully performed the contract on their part.

The fifth finding is not justified by the evidence in so far as it finds that Mrs. Hall did not find a purchaser or sell the property while her agreement with plaintiff was in force. It is true, the lease for five years, with the exclusive privilege of purchasing, did not bind the lessee to purchase; but Mrs. Hall bound herself to sell to the lessees at any time during the continuance of the lease, and to convey upon payment of $5,000 of the purchase money. She thus placed it out of her power to complete any sale

plaintiffs might make for the space of five years, or forever, as the case might be. Such contracts must have a reasonable construction. The transaction must be considered as to its effect upon her contract with the plaintiffs, and not simply as to whether she had made a contract of sale such as she could, in any event, enforce against a purchaser. This is apparent from the further provision of the contract with the plaintiffs that, if she should withdraw the property from sale, she was bound to pay plaintiffs the same commission as though she had made a sale to an independent purchaser. If the fifth finding had set out the lease with the contract therein giving the lessee the exclusive privilege of purchasing for the period of five years, it would have required, as a conclusion of law, that plaintiffs were entitled to recover under the first count. The latter part of that finding, to the effect that Mrs. Hall is not indebted, etc., is a conclusion of law.

The eighth finding is against the plaintiffs upon the second cause of action, upon which they were not permitted to offer any evidence, and which was not tried.

Some other questions are discussed by appellants, but they need not now be considered. No brief was filed by respondents. The order denying a new trial should be reversed, and a new trial ordered.

We concur: SEARLS, C.; BELCHER, C.

PER CURIAM. For the reasons given in the foregoing opinion, the order denying a new trial is reversed, with directions to set aside the order requiring the plaintiffs to elect between the causes of action stated in the complaint; and a new trial is ordered.

(105 Cal. 376)

BANK OF MARTINEZ v. HEMME ORCHARD & LAND CO. et al. (No. 15,621.)

(Supreme Court of California. Jan. 2, 1895.) COMMERCIAL BANKS-POWERS-LOANS ON REAL ESTATE.

1. In the absence of a prohibitory statute, a commercial bank may loan money on real-estate security.

2. The word "banking," as used in Const. art. 4, § 34, prohibiting the legislature from passing any act granting any charter "for banking purposes," and Id. § 35, commanding the legislature to prohibit any person, association, or corporation from "exercising the privilege of banking or creating paper to circulate as money," refers merely to the issuance of bank bills or paper to circulate as money.

Department 1. Appeal from superior court, Contra Costa county; Jos. P. Jones, Judge.

Action by the Bank of Martinez against the Hemme Orchard & Land Company and others to foreclose a mortgage. Judgment for plaintiff, and defendants appeal. Affirmed.

Earl H. Webb, for appellants. W. S. Tinning, for respondent.

PER CURIAM. This appeal was taken by the Hemme Orchard & Land Company from an order refusing a new trial. The plaintiff is a corporation incorporated under the laws of this state in 1873. The articles of incorporation specify that the corporators desire to incorporate under the laws of the state of California in relation to the formation of corporations "embraced in title 1, pt. 4, div. 1, of the Civil Code of this state"; and, further, "that the purposes for which said corporation is formed are to engage in and carry on the business of banking to such extent and in such branches as may legally be done under the constitution and laws of the state of California." The action was brought to foreclose a mortgage given by defendants August and Minerva E. Hemme to plaintiff to secure a loan made to them by plaintiff. Appellants contend that the mortgage is invalid because ultra vires, and illegal because forbidden by sections 34, 35, art. 4, Const. 1849,1 which was in force when plaintiff was incorporated.

1. So far as the first point depends upon the provisions of the Civil Code, we are unable to see any force in it. The Code authorizes banks of deposit and discount, and prohibits the issuance of paper to circulate as money. Banks of deposit had from time immemorial been almost universally banks of loan and discount. Discount is a mode of loaning. No reason is suggested why they might not as well loan upon land security as any other. We are unable to see any point in the suggestion that because savings banks may loan on real estate therefore commercial banks may not. It might as well be argued that such banks cannot loan on personal security because savings banks are authorized to do so. The power to loan on real estate is not what distinguishes a savings bank from a commercial bank. In some states such loans are prohibited to commercial banks, either expressly or by the language of the charters. Cases arising under such laws have no force here.

2. The second point is no longer open. In Bank v. Fairbanks, 52 Cal. 196, it is said: "Under article 4, § 34, of the constitution of the state, deposit and loan associations may be formed which do not issue paper to circulate as money; and such are not 'banks,' within the prohibition of the constitution, although they may be called 'banks."" We cannot follow the appellants

1 Const. art. 4, § 34, provides that the legislature "shall have no power to pass any act granting any charter for banking purposes; but associations may be formed under general laws for the deposit of gold or silver but no such associations shall make, issue or put in circulation any bill, check, ticket, certificate, promissory note or other paper, or the paper of any bank, to circulate as money." Section 35 provides that the legislature shall prohibit "any person or persons, association, company or corporation from exercising the privileges of banking or creating paper to circulate as money."

in their attempted discrimination between that case and the one in hand. We perceive no essential difference. That decision wa made while the constitution of 1849 was in force, and rights have grown up under it. Even if it did not meet our approval, we should not now feel at liberty to disturb that conclusion. But we think that conclusion correct. The provisions of the constitution of 1849 must be viewed in the light of 1849. The framers of that instrument had a vivid realization of the evils of bank bills issued by private corporations to circulate as money. Practically, they had never known any other money than bank bills till they came to California. The inconvenience arising from such currency was always very great, but the framers of the constitution of 1849 had known the utter prostration of business which resulted from the panic of 1837, when every bank in the United States suspended. As their bills constituted the entire currency of the country, the calamity can be better appreciated than described. The people of California were elated by the possession of rich gold placers, and probably believed that no other currency than gold and silver would be required. The reiteration of the idea shows that they desired above all things to prohibit the circulation of bank bills. This is what they meant by "banking," for while prohibiting it they authorized the formation of associations for the deposit of gold and silver, which, however, shall not put in circulation paper "of any bank" to circulate as money. Section 35 is but the counterpart of section 34, and requires the legislature to prohibit to any person or persons, as well as to corporations, the privileges of banking, which by the preceding section were denied to corporations. The two sections must be taken together, and it cannot be supposed that the convention intended to nullify the express exception made in the same provision. Besides, if the phrase “privileges of banking" includes all functions of banking, it would prohibit any person in the state from drawing a bill of exchange, giving a promissory note, or even collecting a debt, for those and many other transactions, essential to civilization as society is now constituted, are and have for centuries been the usual functions of banks. This is the reductio ad absurdum which shows the conclusion false. The legislature of 184950 passed a law prohibiting any corporation from performing even these acts. Section 3, "Act Concerning Corporations,” passed April 22, 1850. But private persons were not prohibited from doing such business. On the contrary, an act was passed at the same session regulating demand, protest, etc., of bills of exchange and other paper. But the matter need not be pursued further, for it is absurd to attribute to any civilized modern community any such intent. The order appealed from is affirmed.

(105 Cal. 600)
LEVY v. SUPERIOR COURT OF CITY
AND COUNTY OF SAN FRAN-
CISCO et al. (No. 15,577.)
(Supreme Court of California. Jan. 6, 1895.)
CONSTITUTIONAL LAW COMPELLING PERSON TO
TESTIFY AGAINST HIMSELF-UNREASON-
ABLE SEIZURE AND SEARCH.

Code Civ. Proc. §§ 1459, 1460, provide that if an administrator complains that any person is suspected to have concealed, embezzled, etc., any moneys or goods of decedent, or has in his possession any writings tending to disclose the right of decedent to property, or any claim, demand, or lost will, the court may cite such person to appear; that, if he refuses to submit to an examination, the court may commit him to the county jail until he submits, or is discharged; that if, on such examination, it appear he has concealed, embezzled, etc., any moneys cr goods, or has any such writings, the court may order him to disclose his knowledge, and may commit him to the county jail until the order is complied with, or he is discharged. Held, that such statute is remedial, and not criminal, and is not in conflict with Const. art. 1, § 13, providing that no person shall "be compelled in any criminal case to be a witness against himself," or with article 1, § 19, providng that "the right of the people to be secure in their persons, houses, papers and effects against unreasonable seizures and searches, shall not be violated." McFarland and De Haven, JJ., dissenting.

In bank.

Petition by H. M. Levy for a writ of prohibition to the superior court of the city and county of San Francisco, department No. 9, and J. V. Coffey, judge of such court, commanding them to refrain and desist from further proceeding with a certain proceeding for the examination of petitioner on oath concerning property belonging to the estate of Morris Hoeflich, deceased, which it is alleged petitioner concealed and disposed of. Writ denied.

Byron Waters, J. B. Brandt, and Reddy, Campbell & Metson, for petitioner. Henry E. Highton, for respondents.

VAN FLEET, J. Morris Hoeflich died at the city and county of San Francisco in May, 1891, and Solomon Hoeflich was by the superior court of said city and county appointed administrator of his estate. Thereafter, on the day of June, 1893, the administrator filed in said superior court a petition in the matter of said estate, averring, in substance, that it had come to his knowledge that said deceased was at and prior to his death either a full partner with one H. M. Levy, or engaged with said Levy jointly in a large number of transactions in stocks and mines in California and Nevada, and in other property, "the exact nature and extent of which transactions, and of the real and personal estate resulting therefrom, can be ascertained by an examination of the said H. M. Levy and other witnesses under oath, and by the production and examination of books of account, correspondence, checks, deeds, conveyances, bonds, contracts, and other writ ings and documents now in the exclusive

possession of said H. M. Levy"; and also by the examination of other named persons, and documents, etc., in their possession. The petition further averred that said Levy has concealed, conveyed away, and disposed of moneys and property of said deceased, and has in his possession and within his knowledge deeds and other documents and writings "which contain evidences of and tend to disclose the right, title, interest, and claim of said deceased to real and personal property," portions of such property being particularly described. The prayer was that said Levy be cited to appear before said court and undergo an examination under oath, together with such witnesses as might be then produced, touching all the matters set forth in the petition, "and especially touching his possession and knowledge of any and all deeds, conveyances, bonds, contracts, or other writings, which contain evidences of or tend to disclose the right, title, and interest or I claim of the decedent, Morris Hoeflich, to any real or personal estate, or any claim or demand whatsoever"; and that said Levy be required to produce all said deeds, conveyances, and other writings, books of account, etc., for inspection and examination. In response to a citation issued upon said petition, said Levy appeared and demurred, which demurrer being overruled, he filed a verified answer specifically denying all the material averments of the petition; denied that he had any property in winch the deceased was interested, as a partner or otherwise, or that he had any documents or writings relating to any such property. He also filed written objections to any further proceedings in the matter of said examination; but the demurrer and the objections were overruled, and a day was set by the court for the examination. There upon said Levy filed his petition here, setting up these facts, upon which he makes this application for a writ of prohibition directed to said court, and the Honorable J. V. Coffey, judge thereof, commanding said respondents to refrain and desist from further proceeding with said contemplated examination. An alternative writ was issued, in response to which respondents have demurred and answered, and the matter has since been argued and submitted.

The proceedings in the superior court which are called into question by this application for prohibition were admittedly taken under and in pursuance of sections 1459 and 1460 of the Code of Civil Procedure, and these sections are as follows:

"Section 1459. If any executor, administrator or other person interested in the estate of a decedent complains to the superior court, or a judge thereof, on oath, that any person is suspected to have concealed, embezzled, smuggled, conveyed away, or disposed of any moneys, goods or chattels of the decedent, or has in his possession or knowledge any deeds, conveyances, bonds, contracts or other writings, which contain evidences of or tend to

disclose the right, title, interest or claim of the decedent to any real or personal estate, or any claim or demand, or any lost will, the said court or judge may cite such person to appear before such court, and may examine him on oath upon the matter of such complaint. If such person is not in the county where the decedent dies, or where letters have been granted, he may be cited and examined either before the superior court of the county where he is found, or before the superior court of the county where the decedent dies, or where letters have been granted. But if, in the latter case, he appears and is found innocent, his necessary expenses must be allowed him out of the estate.

"Section 1460. If the person so cited refuses to appear and submit to an examination, or to answer such interrogatories as may be put to him touching the matters of the complaint, the court may, by warrant for that purpose, commit him to the county jail, there to remain in close custody until he submits to the order of the court, or is discharged according to law. If, upon such examination, it appears that he has concealed, embezzled, smuggled, conveyed away, or disposed of any moneys, goods or chattels of the decedent, or that he has in his possession or knowledge any deeds, conveyances, bonds, contracts or other writings containing evidences of or tending to disclose the right, title, interest, or claim of the decedent to any real or personal estate, claim or demand, or any lost will of the decedent, the court may make an order requiring such person to disclose his knowledge thereof to the executor or administrator, and may commit him to the county jail, there to remain until the order is complied with, or he is discharged according to law; and all such interrogatories and answers must be in writing, signed by the party examined, and filed in the court. The order for such disclosure made upon such examination shall be prima facie evidence of the right of the executor or administrator to such property in any action brought for the recovery thereof; and any judgment recovered therein must be for double the value of the property as assessed by the court or jury, or for return of the property and damages in addition thereto, equal to the value of such property. In addition to the examination of the party, witnesses may be produced and examined on either side."

Petitioner contends that these provisions of the Code are unconstitutional and void, and that the proceeding in the superior court is, therefore, without warrant of law. His position is that they are obnoxious to several features of the constitution of the state, and more particularly to section 13 of article 1, which provides that: "No person shall be compelled in any criminal case to be a witness against himself"; and to section 19 of the same article, which provides that: "The right of the people to be secure in their persons, houses, papers and effects,

*

against unreasonable seizures and searches, shall not be violated." These two provisions of the constitution are of well-understood significance; they involve like principles, and, in considering the objection made, may be regarded as one. The argument of petitioner is that these sections of the Code are distinctly penal in character, and contemplate a proceeding which is in its essential nature criminal, within the meaning of the above provisions of the constitution; that, being a criminal proceeding, petitioner is protected by the constitution from being compelled to testify against himself, or submit his books and papers in evidence.

There is no question that, if petitioner's premises are correct, his conclusion follows necessarily. But his construction of the provisions in question cannot be sustained. These provisions have received a construction at the hands of this court directly at variance with that put upon them by petitioner. Sections 1458-1461 of the Code of Civil Procedure were, prior to the adoption of the Codes, a part of the old probate act, as sections 116-119; they are a part of the same article, and relate to the same subject, which is expressed in the title as "Embezzlement and surrender of property of the estate." In the case of Jahns v. Nolting, 29 Cal. 507, this court had occasion to construe section 116 of the probate act (now section 1458, Code Civ. Proc.) upon the very feature now involved. That was an action by an administrator to recover property belonging to the estate of his decedent, which he alleged had been embezzled by defendant and converted to his own use. The lower court held that the ac*ion was brought under section 116 of the probate act, which alone gave plaintiff a remedy for the wrong; that the statute was penal in its nature, and that the plaintiff was bound to prove the embezzlement as alleged, or fail in his action. Judgment having gone against him, the plaintiff appealed, and in disposing of that question the court said: "The position that section one hundred and sixteen affords the exclusive remedy for embezzling and alienating the effects of the deceased, intermediate the death of the deceased and the grant of administration, cannot be maintained, unless that section can be held to be a penal statute. The

distinctions between penal and remedial statutes are not always clearly marked, nor are the authorities quite harmonious where statutes very similar in their purpose and general terms have been under review. A penal statute is one that imposes a penalty or creates a forfeiture as the punishment for the neglect of some duty, or the commission of some. wrong, that concerns the good of the public, and is commanded or prohibited by law. The law generally first prescribes what shall or shall not be done, and then declares the penalty. Its primary object is punishment, and to deter others from offending in like manner, though it may give the penalty, or some por